OGE
Oge Energy CORP
NYSE
8-K: OGE Energy Corp. Issues $350 Million in Senior Notes
Sentiment:
Debt Issuance Announcement
9 May 2024 11:12 AM
OGE Energy Corp. has successfully completed the issuance of $350 million in senior notes due in 2029, with a 5.45% interest rate.
Capital raise
OGE Energy Corp. has raised $350 million through the issuance of senior notes.
The funds will be used for general corporate purposes.
Summary
- OGE Energy Corp., the parent company of Oklahoma Gas and Electric Company, has issued $350 million in senior notes.
- These notes, designated as the 5.45% Senior Notes, Series due May 15, 2029, will mature on May 15, 2029.
- The notes bear a fixed interest rate of 5.45% per annum, payable semi-annually on May 15 and November 15, starting November 15, 2024.
- The offering was registered under the Securities Act of 1933, and a prospectus supplement was filed with the SEC on May 7, 2024.
- The notes can be redeemed by the company prior to April 15, 2029, at a make-whole redemption price, or at 100% of the principal amount plus accrued interest on or after April 15, 2029.
- The notes are issued in minimum denominations of $2,000 and multiples of $1,000 above that.
Sentiment
Score: 7
Explanation: The document reflects a routine financial transaction, which is positive for the company's financial health and stability. The terms of the debt are reasonable, and the company has successfully accessed the capital markets.
Positives
- The successful issuance of $350 million in senior notes provides OGE Energy with additional capital.
- The fixed interest rate of 5.45% provides predictable financing costs for the company.
- The notes have a defined maturity date of May 15, 2029, allowing for long-term financial planning.
- The ability to redeem the notes early provides flexibility for the company's financial management.
Risks
- The company is exposed to interest rate risk if market rates increase, as the notes have a fixed rate.
- The make-whole redemption provision could be costly if the company chooses to redeem the notes early.
- The company is now obligated to make semi-annual interest payments until the notes mature or are redeemed.
Future Outlook
The company has secured long-term financing through the issuance of these senior notes, which will be used for general corporate purposes.
Industry Context
The issuance of senior notes is a common method for utility companies like OGE Energy to raise capital for operations and investments. This issuance reflects the company's ongoing need for funding and its ability to access the debt markets.
Comparison to Industry Standards
- Issuing senior notes is a standard practice for utility companies to fund operations and capital expenditures.
- The 5.45% interest rate is within the typical range for investment-grade utility debt at the time of issuance, but specific comparisons would require market data from the same period.
- Companies like Duke Energy, Southern Company, and NextEra Energy also frequently issue debt to finance their operations and growth, and their rates and terms would be comparable benchmarks.
Stakeholder Impact
- Shareholders may view the debt issuance as a positive step for the company's financial stability.
- Creditors now hold a claim on the company's assets through the issued debt.
- Customers are not directly impacted by this transaction, but the funds may support infrastructure improvements.
Next Steps
- OGE Energy will make semi-annual interest payments on the notes starting November 15, 2024.
- The company may choose to redeem the notes prior to maturity, subject to the redemption provisions.
Key Dates
- November 1, 2004: Date of the original Indenture between OGE Energy Corp. and BOKF, NA.
- May 2, 2024: Date the shelf registration statement was filed with the SEC.
- May 6, 2024: Date of the Prospectus Supplement and Underwriting Agreement.
- May 7, 2024: Date the prospectus supplement was filed with the SEC.
- May 9, 2024: Date of the Supplemental Indenture No. 5 and the issuance of the Senior Notes.
- May 15, 2029: Stated maturity date of the 5.45% Senior Notes.
- April 15, 2029: Par Call Date, one month prior to the maturity date, after which the notes can be redeemed at 100% of principal.
- November 15, 2024: First interest payment date for the Senior Notes.
Keywords
Senior Notes, Debt Financing, Fixed Income, Capital Markets, OGE Energy Corp, Bond Issuance
OGE
Oge Energy CORP
NYSE
Sector: Utilities
Filings with Classifications
Better than expected
29 April 2025 9:42 PM
Earnings Release
- The company's earnings per share significantly increased from $0.09 to $0.31 compared to the same period last year.
- OG&E's net income nearly tripled, increasing from $25.2 million to $71.0 million year-over-year.
Better than expected
29 April 2025 9:41 PM
Quarterly Report
- Net income increased significantly due to higher operating revenues and lower operation and maintenance expenses.
Better than expected
1 April 2025 4:39 PM
Proxy Statement
- The company's consolidated earnings per share, excluding midstream results, have a compound annual growth rate of 6% over the past 10 years.
- The dividend compound annual growth rate has been 5% over the past 10 years.
- Controllable costs per customer have increased less than 1% per year over the past decade.
Capital raise
18 February 2025 6:03 PM
Annual Results
- OGE Energy expects to issue between $15 million to $25 million of common stock from its Automatic Dividend Reinvestment and Stock Purchase Plan in 2025.
- In 2025, OG&E expects to issue $300 million to $350 million in long-term debt to help fund general operating needs.
Better than expected
18 February 2025 6:03 PM
Earnings Release
- OGE Energy reported higher earnings per share for 2024 compared to 2023.
- OG&E's net income increased significantly in 2024 compared to 2023.
- The company's fourth quarter results were significantly better than the same period in the previous year.
Worse than expected
4 November 2024 5:48 PM
Quarterly Report
- The company's earnings per diluted share decreased from $1.20 in Q3 2023 to $1.09 in Q3 2024.
- OG&E's net income decreased from $246.1 million in Q3 2023 to $225.0 million in Q3 2024.
Worse than expected
4 November 2024 5:46 PM
Quarterly Report
- Net income and earnings per share were lower in Q3 2024 compared to Q3 2023 due to increased expenses.
- Net income and earnings per share were lower for the nine months ended September 30, 2024 compared to the same period in 2023 due to increased expenses.
Capital raise
15 August 2024 11:43 AM
Debt Issuance Announcement
- OG&E has raised $350 million through the issuance of senior notes.
- This is the second tranche of this series of notes, bringing the total raised to $700 million.
Better than expected
6 August 2024 5:42 PM
Quarterly Report
- The company's earnings per share and net income were higher than the same period last year, indicating better than expected results.
- The company expects to be in the top half of its 2024 earnings guidance range, suggesting a positive outlook.
Worse than expected
6 August 2024 5:41 PM
Quarterly Report
- OGE Energy's net income for the first six months of 2024 was lower than the same period in 2023, indicating a worse performance.
Capital raise
6 August 2024 5:41 PM
Quarterly Report
- OGE Energy issued $350 million of 5.45% senior notes due May 15, 2029.
- OG&E increased long-term revolver borrowings by $200 million during the second quarter of 2024.
- OG&E is expected to issue $350 million of senior notes in the third quarter of 2024.
Better than expected
13 June 2024 9:28 AM
Rate Case Settlement Agreement
- The settlement agreement resulted in a significant reduction of the initial rate increase request, from $332.54 million to $126.66 million.
Capital raise
9 May 2024 11:12 AM
Debt Issuance Announcement
- OGE Energy Corp. has raised $350 million through the issuance of senior notes.
- The funds will be used for general corporate purposes.
Worse than expected
30 April 2024 5:42 PM
Quarterly Report
- The company's earnings per diluted share decreased from $0.19 to $0.09 year-over-year, indicating worse than expected results.
- OG&E's earnings per diluted share also decreased from $0.20 to $0.12 year-over-year, indicating worse than expected results.
- The holding company's loss increased from $0.01 to $0.03 per diluted share, indicating worse than expected results.
Capital raise
30 April 2024 5:41 PM
Quarterly Report
- OGE Energy expects to issue up to $350 million of long-term debt in the second quarter of 2024.
- OG&E expects to issue $300 million to $350 million of long-term debt in the second half of 2024.
Worse than expected
30 April 2024 5:41 PM
Quarterly Report
- The company's net income decreased significantly compared to the same period last year, indicating worse than expected results.
Better than expected
1 April 2024 12:14 PM
Proxy Statement
- The company's actual OG&E Earnings Target was $2.12/share, exceeding the target of $2.04/share.
- The company's Environmental Target was achieved at a 200% payout.
- The company's Equivalent Forced Outage Rate was achieved at a 115% payout.
Worse than expected
20 February 2024 7:44 PM
Annual Results
- The company's 2023 earnings per share were lower than the previous year due to the absence of income from natural gas midstream operations and increased operating expenses.
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