ALBUQUERQUE, N.M., June 4, 2024
/PRNewswire/ -- PNM Resources (NYSE: PNM) today announced the
pricing of $500,000,000 in aggregate
principal amount of its 5.75% junior subordinated convertible notes
due 2054 (the "convertible notes") in a private offering to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). In
addition, PNM Resources granted the initial purchasers of the
convertible notes an option to purchase, within a 13-day period
beginning on, and including, the date the convertible notes are
first issued, up to an additional $50,000,000 in aggregate principal amount of the
convertible notes, solely for the purpose of covering
over-allotments, if any. The offering is expected to close on
June 10, 2024, subject to customary
closing conditions.
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The convertible notes will be unsecured obligations of PNM
Resources and will rank junior and subordinate in right of payment
to the prior payment in full of PNM Resources' existing and future
senior indebtedness. Interest on the convertible notes will be paid
semiannually, at a rate of 5.75% per annum, subject to PNM
Resources' right to defer payments of interest as described below.
The convertible notes will mature on June 1,
2054, unless earlier converted, redeemed or repurchased in
accordance with their terms.
So long as no event of default with respect to the convertible
notes has occurred and is continuing, PNM Resources may, at its
option, defer interest payments on the convertible notes on one or
more occasions for up to 20 consecutive semi-annual interest
payment periods. During any deferral period, interest on the
convertible notes will continue to accrue at the then-applicable
interest rate on the convertible notes. In addition, during any
deferral period, interest on deferred interest will accrue at the
then-applicable interest rate on the notes, compounded
semi-annually, to the extent permitted by applicable law.
PNM Resources may not redeem the convertible notes prior to
June 6, 2029 except upon the
occurrence of certain tax events, rating agency events or treasury
stock events (each, a "special event"). PNM Resources may redeem
for cash all, but not less than all, of the convertibles notes upon
the occurrence of a special event at any time, at its option, at a
redemption price equal to 100% of the principal amount of the
convertible notes to be redeemed, plus accrued and unpaid interest
to, but excluding, the redemption date. In addition, PNM Resources
may redeem for cash all or part (subject to certain limitations on
partial redemptions) of the convertible notes, at its option, on or
after June 6, 2029, at a redemption
price equal to 100% of the principal amount of the convertible
notes to be redeemed, plus accrued and unpaid interest to, but
excluding, the redemption date, if the last reported sale price of
PNM Resources' common stock has been at least 130% of the
conversion price of the convertible notes then in effect for at
least 20 trading days (whether or not consecutive) during any 30
consecutive trading day period (including the last trading day of
such period) ending on, and including, the trading day immediately
preceding the date on which PNM Resources provides notice of
redemption. In each case, PNM Resources will not, and will not be
permitted to, issue a notice of redemption, or specify a redemption
date, during any interest deferral period.
Prior to December 1, 2053, holders
will have the right to convert their convertible notes only upon
the occurrence of certain events and during certain periods. On or
after December 1, 2053, holders will
have the right to convert their convertible notes at any time until
the close of business on the second business day immediately
preceding the maturity date of the convertible notes. Upon
conversion of the convertible notes, PNM Resources will (1) (a)
deliver an equal aggregate principal amount of a newly issued
series of its non-convertible junior subordinated notes with the
same terms as the convertible notes (other than the conversion
features) or (b) in certain circumstances as set forth in the
indenture that will govern the convertible notes, pay cash, in
either case, up to the aggregate principal amount of the
convertible notes being converted, and (2) deliver shares of PNM
Resources' common stock in respect of the remainder, if any, of PNM
Resources' conversion obligation in excess of the aggregate
principal amount of the convertible notes being converted.
The conversion rate for the convertible notes will initially be
22.4911 shares of PNM Resources' common stock per $1,000 principal amount of the convertible notes
(equivalent to an initial conversion price of approximately
$44.46 per share of common stock,
which represents a conversion premium of approximately 17.5% above
the last reported sale price of PNM Resources' common stock on
June 4, 2024). The conversion rate is
subject to adjustment in certain circumstances. In addition,
following certain corporate events that occur prior to the maturity
date of the convertible notes or if PNM Resources delivers a notice
of a special event redemption, PNM Resources will, in certain
circumstances, increase the conversion rate for a holder that
elects to convert its convertible notes in connection with such a
corporate event or such notice of special event redemption, as the
case may be.
If PNM Resources undergoes a fundamental change (as defined in
the indenture that will govern the convertible notes), subject to
certain conditions and exceptions, holders of the convertible notes
may require PNM Resources to repurchase for cash all or any portion
of their notes at a fundamental change repurchase price equal to
100% of the principal amount of the notes to be repurchased, plus
accrued and unpaid interest (including any accrued but unpaid
deferred interest) to, but excluding, the repurchase date.
PNM Resources intends to use the net proceeds from this offering
to repay a portion of its outstanding term loans.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such an offer,
solicitation or sale would be unlawful. The offer and sale of the
convertible notes, the non-convertible junior subordinated notes
issuable upon conversion of the convertible notes, if any, and
shares of common stock issuable upon conversion of the convertible
notes, if any, have not been, and will not be, registered under the
Securities Act or the securities laws of any other jurisdiction,
and the convertible notes, such non-convertible junior subordinated
notes and such shares of common stock may not be offered or sold
without registration or an applicable exemption from registration
requirements.
Background:
PNM Resources (NYSE: PNM) is an energy holding company based in
Albuquerque, N.M. Through its
regulated utilities, PNM and TNMP, PNM Resources provides
electricity to more than 800,000 homes and businesses in
New Mexico and Texas. For more information, visit the
company's website at www.PNMResources.com.
Contacts:
|
|
Analysts
|
Media
|
Lisa Goodman
|
Corporate
Communications
|
(505) 241-2160
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(505)
241-2783
|
Safe Harbor under the Private Securities Litigation Reform
Act of 1995
Certain statements contained in this press release are
"forward-looking statements" under federal securities laws. These
statements are based upon management's current expectations and are
subject to risks and uncertainties that could cause actual results
to differ materially from those contemplated in the forward-looking
statements. Readers are cautioned not to place undue reliance on
these statements. Forward-looking statements include, among other
things, statements regarding the completion of the offering of
convertible notes and the intended use of proceeds.
Factors that could cause actual results to differ materially
from those contemplated in any forward-looking statements include,
but are not limited to: market conditions; the satisfaction of
closing conditions related to the offering; and risks relating to
PNM Resources' business, including those described under the
headings "Disclosure Regarding Forward Looking Statements" and
"Risk Factors" in the company's Annual Report on Form 10-K for the
year ended December 31, 2023, and in
subsequent reports filed with the Securities and Exchange
Commission. For a discussion of risk factors and other important
factors affecting forward-looking statements, please see the
company's Form 10-K, Form 10-Q filings and the information included
in the company's Forms 8-K with the Securities and Exchange
Commission, which factors are specifically incorporated by
reference herein. There can be no assurance that the planned
offering of convertible notes will be completed on the anticipated
terms, or at all. Except as may be required by law, PNM Resources
expressly disclaims any obligation to update any forward-looking
information.
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SOURCE PNM RESOURCES, INC.