CenterPoint Energy, Inc. announces public offering of $250 million of Common Stock

Rhea-AI Summary

CenterPoint Energy (NYSE: CNP) has announced a public offering of $250 million in common stock.

The proceeds from this offering will be used for general corporate purposes, including the repayment of a portion of outstanding commercial paper, which was initially utilized for general corporate purposes and working capital.

Barclays Capital Inc. and Citigroup are the joint book-running managers and underwriters for this offering. The offering is conducted through CenterPoint Energy’s effective shelf registration statement on Form S-3 previously filed with the SEC.

The offering will be made only via a prospectus and related prospectus supplement compliant with Section 10 of the Securities Act of 1933. Copies can be obtained from the SEC's website or directly from Barclays Capital Inc. and Citigroup. CenterPoint Energy's common stock is listed under the symbol CNP on the New York Stock Exchange and NYSE Chicago.

Positive

• CenterPoint Energy plans to raise $250 million through a public offering of common stock.
• Proceeds will be used for general corporate purposes, including repaying commercial paper debt.

Negative

• The public offering of $250 million in common stock may lead to shareholder dilution.

Insights

Financial Analyst

CenterPoint Energy's $250 million common stock offering is a significant move that could impact its financial structure. This equity issuance will likely strengthen the company's balance sheet by reducing reliance on commercial paper, which is typically short-term debt. However, it will also dilute existing shareholders.

The use of proceeds for "general corporate purposes" and debt repayment suggests a conservative financial strategy. This could be viewed positively by credit rating agencies, potentially leading to improved credit metrics. However, investors should note that the dilution effect might offset any immediate benefits to the stock price.

The involvement of major underwriters like Barclays and Citigroup indicates strong institutional support for the offering, which could boost investor confidence. Overall, this move appears to be a prudent financial decision, balancing the need for capital with maintaining financial flexibility.

Utility Sector Specialist

CenterPoint Energy's decision to raise $250 million through a common stock offering is noteworthy in the utility sector context. Utilities often use equity issuances to fund capital-intensive projects or strengthen their financial position. This move suggests CenterPoint may be preparing for future investments or regulatory challenges.

The timing of this offering is interesting, as it comes amid increasing focus on grid resilience and clean energy transitions. CenterPoint might be positioning itself to take advantage of growth opportunities in these areas. However, investors should consider that utility stocks are often seen as income investments and dilution could potentially impact dividend growth in the short term.

From a regulatory perspective, this equity issuance could be viewed favorably, as it demonstrates financial prudence and a commitment to maintaining a healthy capital structure. This could potentially smooth future rate case proceedings, benefiting the company's long-term outlook.

HOUSTON--(BUSINESS WIRE)-- CenterPoint Energy, Inc. (NYSE: CNP) today announced that it intends to sell $250 million of shares of its common stock, par value $0.01 per share, in an underwritten public offering, subject to market and other conditions.

CenterPoint Energy intends to use the net proceeds from the offering for general corporate purposes, including repayment of a portion of our outstanding commercial paper. Proceeds from our commercial paper were used for general corporate purposes, including working capital purposes.

Barclays Capital Inc. and Citigroup are acting as joint book-running managers and underwriters for the offering.

The offering is being made pursuant to CenterPoint Energy’s effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission (SEC). The offering will be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Copies of the prospectus supplement and accompanying base prospectus meeting such requirements related to each offering may be obtained free of charge from the SEC's website, www.sec.gov or from:

Barclays Capital Inc.,
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York 11717
Barclaysprospectus@broadbridge.com
(888) 603-5847

Citigroup
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York 11717
(Tel: 800 831-9146)

CenterPoint Energy's common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol CNP.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any shares of common stock or any other securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

This press release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this press release regarding the size and terms of the offering, the use of proceeds from the offering, and other statements that are not historical facts, are forward-looking statements. Factors that could affect actual results include, but are not limited to, factors, risk and uncertainties discussed in CenterPoint Energy, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and CenterPoint’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and other reports CenterPoint Energy may file from time to time with the Securities and Exchange Commission.

As the only investor-owned electric and natural gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas. As of June 30, 2024, the company owned approximately $41 billion in assets. With approximately 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240807465366/en/

Media:

Communications

media.relations@centerpointenergy.com

Investors:

Jackie Richert / Ben Vallejo

713.207.6500

Source: CenterPoint Energy, Inc.

FAQ

What is the value of CenterPoint Energy's public offering?

CenterPoint Energy is offering $250 million worth of common stock.

What will the proceeds from CenterPoint Energy's offering be used for?

The proceeds are intended for general corporate purposes, including repaying outstanding commercial paper.

Which companies are managing CenterPoint Energy's public offering?

Barclays Capital Inc. and Citigroup are acting as joint book-running managers and underwriters.

Under which stock symbol is CenterPoint Energy listed?

CenterPoint Energy is listed under the symbol CNP on the New York Stock Exchange and NYSE Chicago.