Ameren Missouri Announces Pricing of First Mortgage Bonds due 2035

Rhea-AI Summary

Ameren Missouri, a subsidiary of Ameren (NYSE: AEE), has announced the pricing of $500 million aggregate principal amount of first mortgage bonds. The bonds will carry a 5.25% interest rate, mature in 2035, and are priced at 99.975% of their principal amount.

The transaction is expected to close on April 4, 2025. The company plans to use the net proceeds to repay short-term debt and/or fund near-term capital expenditures. The offering is being managed by joint book-runners including Goldman Sachs & Co. , RBC Capital Markets, , Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., and PNC Capital Markets

Positive

• Successful pricing of $500 million in mortgage bonds indicates strong market access
• Long-term debt financing provides stable capital structure through 2035
• Potential reduction in short-term debt exposure through refinancing

Negative

• 5.25% interest rate represents ongoing debt service costs
• Additional long-term debt increases company's leverage

Insights

Financial Analyst

Ameren Missouri's $500 million first mortgage bond offering represents a strategic financial maneuver that strengthens the company's capital structure. The bonds, priced at 99.975% of principal amount with a 5.25% coupon rate maturing in 2035, demonstrate the utility's continued access to debt markets at competitive rates.

The dual-purpose utilization of proceeds is noteworthy. By refinancing short-term debt with these longer-term bonds, Ameren is effectively extending its debt maturity profile, which reduces near-term refinancing risk and provides stability to its capital structure. This type of liability management is particularly valuable for utilities, which typically align financing strategies with their long-lived infrastructure assets.

The $500 million offering size represents approximately 1.9% of Ameren's $26.17 billion market capitalization, making it material but not transformative to the overall balance sheet. For regulated utilities like Ameren Missouri, securing long-term financing at fixed rates provides predictability for financial planning and potentially supports regulated capital expenditure programs that can be recovered through future rate cases.

The engagement of five reputable financial institutions as joint book-runners signals broad market support for the offering. While this transaction doesn't materially alter Ameren's investment profile, it demonstrates prudent financial management consistent with industry practices among major utilities.

ST. LOUIS, March 26, 2025 /PRNewswire/ -- Union Electric Company, doing business as Ameren Missouri, a subsidiary of Ameren Corporation (NYSE: AEE), announced today the pricing of a public offering of $500 million aggregate principal amount of 5.25% first mortgage bonds due 2035 at 99.975% of their principal amount. The transaction is expected to close on April 4, 2025, subject to the satisfaction of customary closing conditions.

Ameren Missouri intends to use the net proceeds of the offering to repay short-term debt and/or fund near-term capital expenditures.

Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and PNC Capital Markets LLC are acting as joint book-running managers for the offering.

The offering is being made only by means of a prospectus and related prospectus supplement. A prospectus supplement related to the offering will be filed with the Securities and Exchange Commission. Copies of the prospectus and related prospectus supplement for the offering, when available, may be obtained via the Securities and Exchange Commission's website at www.sec.gov or by contacting Scotia Capital (USA) Inc., 250 Vesey Street, New York, New York 10281, Attention: U.S. Debt Capital Markets, Telephone: 1-800-372-3930.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the first mortgage bonds and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful.

About Ameren Missouri

Ameren Missouri has been providing electric and gas service for more than 100 years. Ameren Missouri's mission is to power the quality of life for its 1.3 million electric and 135,000 natural gas customers in central and eastern Missouri. The company's service area covers approximately 60 counties and more than 500 communities, including the greater St. Louis area. 

View original content:https://www.prnewswire.com/news-releases/ameren-missouri-announces-pricing-of-first-mortgage-bonds-due-2035-302412628.html

SOURCE Ameren Missouri

FAQ

What is the interest rate and maturity of Ameren Missouri's (AEE) new mortgage bonds?

The bonds carry a 5.25% interest rate and will mature in 2035.

How much is Ameren Missouri (AEE) raising through the mortgage bond offering?

Ameren Missouri is raising $500 million through the first mortgage bond offering.

When will Ameren Missouri's (AEE) 2035 bond offering close?

The bond offering is expected to close on April 4, 2025.

How will Ameren Missouri (AEE) use the proceeds from the 2035 bond offering?

The proceeds will be used to repay short-term debt and/or fund near-term capital expenditures.

Which investment banks are managing Ameren Missouri's (AEE) 2035 bond offering?

Goldman Sachs, RBC Capital Markets, Scotia Capital, SMBC Nikko Securities, and PNC Capital Markets are joint book-running managers.