Mizuno to sell convertible bonds
TL;DR
Mizuho leads three landmark convertible bond deals in the Power & Utilities sector, marking the first investment-grade utility convertibles in 14 years. These transactions offer lower coupon rates and broader investor access, highlighting convertible bonds' appeal in a high-rate environment.
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Mizuno to sell convertible bonds
Mizuho Facilitates Record Convertible Bond Activity in Utilities Sector
Mizuho has emerged as a key player in the convertible bond market, particularly in the Power & Utilities sector, where it has led three landmark transactions this year. These offerings mark the first investment-grade convertible bonds issued by utility companies in 14 years, signaling a strategic shift in corporate financing amid rising interest rates.
The bank acted as a bookrunner for PPL Corporation, The Southern Company, and Alliant Energy, all of which raised significant capital through convertible senior notes. PPL Corporation secured $1.0 billion in exchangeable senior notes due 2028, priced at a 2.875% coupon with a 22.5% conversion premium. The Southern Company raised $1.725 billion via convertible senior notes due 2025, featuring a 3.875% coupon and a 30.0% conversion premium. Alliant Energy completed a $500 million offering with similar terms, executed on a one-day marketed basis.
These transactions highlight the advantages of convertible bonds, including lower coupon rates compared to straight debt and access to a broader investor base. For utility issuers, the absence of recent utility-sector convertible bonds and strong demand for investment-grade paper contributed to favorable pricing outcomes.
Mizuho's expertise in structuring such deals is underscored by its 4th-place ranking on the Bloomberg 2023 YTD Equity-Linked League Table. The bank attributes its success to deep investor relationships and a tailored approach to client needs, emphasizing customization over conventional solutions.
While Mizuho has not announced its own convertible bond issuance, its role as a leading underwriter underscores the growing appeal of convertible debt as a financing tool in a high-rate environment. Investors and corporations alike are increasingly turning to this hybrid instrument to balance cost efficiency and market flexibility.
Mizuho, Your Leading Bank for Convertible Bond Transactions: Transaction Highlights for PPL, Southern Company, and Alliant Energy
Mizuho's Market Position and Convertible Bond Strategy: Mizuho, Your Leading Bank for Convertible Bond Transactions
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