Xcel Energy Announces Pricing of Common Stock Offering with a Forward Component

Rhea-AI Summary

Xcel Energy (NASDAQ: XEL) has priced a registered underwritten offering of 18,320,610 shares of common stock at $65.50 per share. The company entered into forward sale agreements with Barclays Bank PLC and Bank of America, N.A. The underwriters have a 30-day option to purchase up to an additional 2,748,091 shares. Settlement is expected by June 30, 2026. The proceeds will be used for general corporate purposes, including capital contributions to utility subsidiaries, acquisitions, and/or short-term debt repayment. The offering is expected to close around November 5, 2024.

Positive

• Significant capital raise through 18.3M share offering at $65.50 per share
• Flexible settlement options including cash or net share settlement
• Potential for additional capital through 2.7M share option granted to underwriters
• Strengthening balance sheet through debt repayment capability

Negative

• Potential dilution of existing shareholders' equity
• Long settlement period extending to June 2026 creates execution uncertainty

Insights

Financial Analyst

This $1.2 billion equity offering through forward sale agreements represents a significant capital raise for Xcel Energy. The pricing at $65.50 per share reflects current market conditions, with the company issuing 18.3 million shares plus a potential additional 2.7 million through the underwriters' option.

The flexible settlement structure until June 2026 provides Xcel strategic optionality in timing the actual share issuance. This approach helps minimize immediate dilution while securing funding for future capital needs. The forward sale component allows Xcel to lock in today's price while deferring the actual share issuance, protecting against potential future stock price volatility.

The broad use of proceeds for general corporate purposes, including potential utility subsidiary investments and debt management, indicates this raise strengthens Xcel's overall financial position and supports its growth initiatives in the regulated utility space.

MINNEAPOLIS--(BUSINESS WIRE)-- Xcel Energy Inc. (NASDAQ: XEL) (Xcel Energy) announced today the pricing of a registered underwritten offering of 18,320,610 shares of its common stock at a public offering price of $65.50 per share in connection with the forward sale agreements described below. Subject to certain conditions, all shares are expected to be borrowed by the forward purchasers (as defined below) (or their affiliates) from third parties and sold to the underwriters and offered in connection with such forward sale agreements. Barclays and BofA Securities are acting as joint lead book-running managers for this offering. Citigroup and Wells Fargo Securities are acting as joint book-running managers for this offering. Closing of this offering is expected to occur on or about November 5, 2024, subject to customary closing conditions.

In connection with the offering, Xcel Energy entered into separate forward sale agreements with each of Barclays Bank PLC and Bank of America, N.A. (in such capacity, the forward purchasers) under which Xcel Energy agreed to issue and sell to the forward purchasers an aggregate of 18,320,610 shares of its common stock. In addition, the underwriters of the offering have been granted a 30-day option to purchase up to an additional 2,748,091 shares of Xcel Energy’s common stock upon the same terms. If the underwriters exercise their option, Xcel Energy may elect to enter into additional forward sale agreements with the forward purchasers with respect to the additional shares or to issue and sell such shares directly to the underwriters.

Settlement of the forward sale agreements is expected to occur on or prior to June 30, 2026. Xcel Energy may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of its rights or obligations under either of the forward sale agreements.

If Xcel Energy elects physical settlement of either of the forward sale agreements, it presently expects to use the net proceeds for general corporate purposes, which may include capital contributions to its utility subsidiaries, acquisitions, and/or repayment of short-term debt.

The offering is being made pursuant to Xcel Energy’s effective shelf registration statement filed with the Securities and Exchange Commission (SEC). The prospectus supplement and the accompanying prospectus related to the offering will be available on the SEC’s website at www.sec.gov. Copies of the prospectus supplement and the accompanying prospectus relating to the offering may be obtained from the joint lead book-running managers for the offering:

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

BofA Securities
NC1-022-02-25
201 North Tryon Street
Charlotte, NC 28255-0001
Attn: Prospectus Department
Email: dg.prospectus_requests@bofa.com

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which the offer, solicitation or sale of these securities would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

About Xcel Energy

Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices.

This press release contains forward-looking statements regarding, among other things, Xcel Energy’s expectations regarding its planned offer and sale of common stock and the use of the net proceeds from any such sale. Xcel Energy cannot be sure that it will complete the offering or, if it does, on what terms it will complete it. Forward-looking statements are based on current beliefs and expectations and are subject to inherent risks and uncertainties, including those discussed under the caption “Special Note Regarding Forward-Looking Statements” in the prospectus supplement. In addition, Xcel Energy management retains broad discretion with respect to the allocation of net proceeds of the planned offering. The forward-looking statements speak only as the date of release, and Xcel Energy is under no obligation to, and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as the result of new information, future events or otherwise, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104349478/en/

For more information:

Paul Johnson, Vice President, Treasury & Investor Relations (612) 215-4535

Roopesh Aggarwal, Senior Director - Investor Relations (303) 571-2855

Source: Xcel Energy

FAQ

What is the price per share for Xcel Energy's (XEL) new stock offering?

Xcel Energy (XEL) priced its common stock offering at $65.50 per share.

How many shares is Xcel Energy (XEL) offering in its 2024 stock sale?

Xcel Energy is offering 18,320,610 shares, with an additional option for underwriters to purchase up to 2,748,091 shares.

When will Xcel Energy's (XEL) forward sale agreements settle?

The forward sale agreements are expected to settle on or prior to June 30, 2026.

What will Xcel Energy (XEL) use the stock offering proceeds for?

The proceeds will be used for general corporate purposes, including capital contributions to utility subsidiaries, acquisitions, and/or repayment of short-term debt.