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

Rhea-AI Summary

Xcel Energy (NASDAQ: XEL) has announced a registered underwritten offering of $1.2 billion of common stock shares, with an additional $180 million option available to underwriters. The company will enter forward sale agreements with Barclays Bank PLC and Bank of America, N.A. as forward purchasers. Settlement is expected by June 30, 2026. The net proceeds will be used for general corporate purposes, including capital contributions to utility subsidiaries, acquisitions, and/or short-term debt repayment. Barclays and BofA Securities are acting as joint book-running managers for the offering.

Positive

• Substantial capital raise of $1.2 billion with potential for additional $180 million
• Flexible settlement options including cash or net share settlement
• Strategic use of proceeds for capital contributions and debt repayment

Negative

• Potential dilution of existing shareholders' value
• Long settlement period extending to June 2026
• Additional debt/equity obligations through forward sale agreements

Insights

Financial Analyst

This $1.2 billion forward equity offering represents a significant capital raise for Xcel Energy, with flexibility in settlement options through 2026. The structure, using forward sale agreements, is strategically designed to minimize immediate dilution while securing future funding. The additional $180 million option provides extra financial flexibility.

The forward sale structure allows XEL to lock in today's equity price while deferring actual issuance, providing protection against potential market volatility. The funds will strengthen the balance sheet and support utility operations, which is important given the capital-intensive nature of the utility sector. With a market cap of $37.6 billion, this offering represents approximately 3.2% of the company's current value.

MINNEAPOLIS--(BUSINESS WIRE)-- Xcel Energy Inc. (NASDAQ: XEL) (Xcel Energy) announced today the commencement of a registered underwritten offering of $1.2 billion of shares of its common stock. 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 the forward sale agreements described below. Barclays and BofA Securities are acting as joint book-running managers for this offering. The underwriters may offer shares of Xcel Energy’s common stock in transactions on the Nasdaq Stock Market LLC, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.

In connection with the offering, Xcel Energy expects to enter 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 will agree to issue and sell shares of its common stock to the forward purchasers at an initial forward sale price per share equal to the price per share at which the underwriters purchase the shares in the offering, subject to certain adjustments, upon physical settlement of the relevant forward sale agreement. In addition, the underwriters of the offering expect to be granted a 30-day option to purchase up to an additional $180 million of 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 preliminary 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 preliminary prospectus supplement and the accompanying prospectus relating to the offering may be obtained from the joint 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 of 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/20241102647878/en/

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 size of Xcel Energy's (XEL) common stock offering announced in 2024?

Xcel Energy announced a $1.2 billion common stock offering, with an additional option for underwriters to purchase up to $180 million in shares.

When is the settlement date for Xcel Energy's (XEL) forward sale agreements?

The settlement of the forward sale agreements is expected to occur on or prior to June 30, 2026.

How will Xcel Energy (XEL) use the proceeds from its stock offering?

Xcel Energy plans to use the net proceeds for general corporate purposes, including capital contributions to utility subsidiaries, acquisitions, and/or repayment of short-term debt.

Who are the underwriters for Xcel Energy's (XEL) stock offering?

Barclays and BofA Securities are acting as joint book-running managers for the offering.