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TXNM Energy, Inc. (NYSE:TXNM) announced Tuesday that it has commenced marketing for a potential private offering of fixed-to-fixed reset rate junior subordinated notes. According to a statement in a Securities and Exchange Commission filing, the notes would be offered to qualified institutional buyers in the United States under Rule 144A and to non-U.S. persons outside the country under Regulation S. The company currently carries a substantial debt burden of $5.75 billion with a debt-to-equity ratio of 1.68, according to InvestingPro data. TXNM stock is currently trading near its 52-week high of $58.45.
The company also disclosed that TXNM Energy and its wholly owned subsidiary, Public Service Company of New Mexico, are evaluating a possible pension risk transfer transaction. This transaction would involve the purchase of one or more group annuity contracts from an insurance company to assume up to $100 million of pension obligations related to the company’s previously disposed gas distribution business. The transfer would use assets already held in the plan’s trust, and TXNM does not currently anticipate making additional cash contributions to the plan in connection with the transfer.
If completed, an insurer would be responsible for future benefit payments to covered retirees and beneficiaries under the terms of the annuity contract. TXNM stated that, if the pension transfer is completed, it expects to record a non-cash charge to net income of approximately $65 million, or $50 million on an after-tax basis. This charge would impact the company’s earnings, which currently support a P/E ratio of 31.91, considered high by market standards. InvestingPro analysis indicates TXNM’s current ratio stands at 0.51, suggesting its short-term obligations exceed liquid assets.
The company noted in its filing that there is no assurance the junior subordinated notes offering or the pension transfer transaction will be completed, or as to the terms or timing of any such transactions. The notes will not be registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.
This information is based on a statement made in a press release and disclosed in a recent SEC filing.
In other recent news, TXNM Energy, Inc. has made several announcements that may interest investors. The company began marketing a potential private offering of fixed-to-fixed reset rate junior subordinated notes, targeting qualified institutional buyers and non-U.S. persons. Additionally, TXNM Energy is considering a pension risk transfer transaction involving its subsidiary, Public Service Company of New Mexico, which could involve up to $100 million in pension obligations. Public Service Company of New Mexico also declared a regular quarterly dividend of $1.145 per share on its preferred stock, payable in January 2026.
Furthermore, Public Service Company of New Mexico secured a $120 million term loan with a group of lenders, facilitated by U.S. Bank National Association, to refinance a portion of its 2024 term loan. In another development, Texas-New Mexico Power Company, an indirect subsidiary of TXNM Energy, amended its mortgage indenture with U.S. Bank Trust Company, National Association. The amendment modifies financial reporting requirements and revises the definition of change in control. These recent developments reflect ongoing financial and operational strategies within TXNM Energy and its subsidiaries.
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