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Spire (NYSE:SR) Missouri Inc., a wholly-owned subsidiary of Spire Inc. (market capitalization: $4.5 billion), has entered into a significant financial agreement, securing $150 million through the issuance of two sets of First Mortgage Bonds. This transaction, outlined in an 8-K filing with the Securities and Exchange Commission today, details the private placement of $90 million in bonds due in 2030 with a 4.88% interest rate, and $60 million due in 2032 at a 5.12% interest rate. According to InvestingPro data, the company has maintained dividend payments for 55 consecutive years, demonstrating long-term financial stability.
The closing of this deal is expected by May 1, 2025, with the bonds to be secured by a Mortgage and Deed of Trust under which Regions Bank serves as the trustee. The proceeds from the bond sale are earmarked for general corporate purposes, providing Spire Missouri with additional capital for its operations. This financing comes at a time when the company’s current ratio stands at 0.5, with total debt of $4.9 billion, suggesting a strategic move to manage its capital structure.
The bonds, which will be issued under an existing mortgage, will rank equally with other first mortgage bonds. The bond agreement includes standard provisions such as limitations on liens and the payment of dividends, as well as customary events of default like payment defaults and insolvency. InvestingPro analysis reveals additional insights about the company’s financial health and future prospects, with over 30 key metrics and exclusive ProTips available to subscribers.
Additionally, Spire Missouri retains the option to redeem the bonds at 100% of their principal amount plus a "make-whole amount," which compensates for the loss of future interest payments. This amount is calculated based on a discount factor over the yield of comparable U.S. Treasury securities. Specific redemption conditions are outlined, including redemption opportunities starting September 15, 2030, for the 2030 Bonds, and September 15, 2032, for the 2032 Bonds.
This financial move by Spire Missouri Inc. represents a strategic effort to reinforce its financial position through long-term financing. The information in this article is based on a press release statement.
In other recent news, Spire Inc. has seen several notable developments. JPMorgan upgraded Spire’s stock rating from Neutral to Overweight and increased the price target to $85, citing favorable regulatory changes in Missouri and the positive impact of newly enacted legislation. Mizuho (NYSE:MFG) Securities also adjusted its price target for Spire to $82, maintaining an Outperform rating, with expectations of future earnings growth driven by Missouri’s legislative advancements. Ladenburg Thalmann upgraded Spire to a Buy rating with a new price target of $83, highlighting resolved regulatory concerns and optimistic financial projections. Guggenheim Securities raised its price target for Spire to $72 while maintaining a Neutral rating, following positive insights from a recent non-deal roadshow. Additionally, Spire announced that CEO Steven Lindsey will resume his duties on February 10, 2025, after a health-related leave of absence. These recent developments reflect a period of significant activity and analysis for Spire, with various firms expressing confidence in its future prospects.
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