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TXNM Energy, Inc. (NYSE:TXNM) announced Tuesday that it has started marketing a potential private offering of fixed-to-fixed reset rate junior subordinated notes. According to a statement released in a Securities and Exchange Commission filing, the offering would be made to qualified institutional buyers under Rule 144A and to non-U.S. persons 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 is currently trading near its 52-week high at $58.40 and appears overvalued based on Fair Value assessments.
The company also disclosed it is considering a pension risk transfer transaction involving its wholly-owned subsidiary, Public Service Company of New Mexico. The proposed transaction would involve purchasing one or more group annuity contracts from an insurance company to assume up to $100 million in pension obligations and related assets from the PNM Resources, Inc. Employees’ Retirement Plan. The obligations relate to retirees and beneficiaries associated with PNM’s previously divested gas distribution business.
If completed, the annuity contracts would be funded with assets from the plan’s trust, and TXNM Energy does not expect to make additional cash contributions to the plan for this transaction. An insurer would then become responsible for future benefit payments to the affected retirees and beneficiaries under the terms of the annuity contracts.
TXNM Energy stated that, should the pension transfer proceed, it expects to record a non-cash charge to net income of approximately $65 million, or $50 million after taxes.
The company noted that there is no assurance the junior subordinated notes offering or the pension risk transfer transaction will be completed, or as to the terms or timing of any transaction. 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 released Tuesday in a filing with the Securities and Exchange Commission.
In other recent news, Public Service Company of New Mexico, a subsidiary of TXNM Energy, declared a quarterly dividend of $1.145 per share on its 4.58 percent series of cumulative preferred stock. This dividend will be payable on January 15, 2026, to shareholders of record as of December 31, 2025. Additionally, Public Service Company of New Mexico entered into a $120 million term loan agreement with a group of lenders, with U.S. Bank National Association acting as the administrative agent. The loan, effective immediately, requires full repayment by May 10, 2027, and is intended to refinance a portion of the company’s outstanding balance on its 2024 term loan.
Furthermore, TXNM Energy’s subsidiary, Texas-New Mexico Power Company, has amended its mortgage indenture through a Twenty-Fifth Supplemental Indenture with U.S. Bank Trust Company, National Association. This amendment revises several provisions of the existing indenture agreements, including changes to financial reporting requirements and the definition of change in control. These developments underscore TXNM Energy’s ongoing efforts to manage its financial commitments and regulatory compliance.
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