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TXNM Energy, Inc. (NYSE:TXNM), a $6 billion market cap energy company with a track record of 30 consecutive years of dividend payments, announced Friday that it has entered into a distribution agreement with BofA Securities, MUFG Securities Americas, RBC Capital Markets, and Scotia Capital (USA) as sales agents, as well as Bank of America, MUFG Securities EMEA, Royal Bank of Canada, and The Bank of Nova Scotia as forward purchasers. According to InvestingPro data, the company operates with substantial debt of $5.8 billion, making this offering particularly significant for its capital structure. The agreement allows the company to offer and sell up to $200 million of its common stock through at-the-market offerings. The timing of this offering comes as TXNM’s stock trades near its 52-week high of $57.42, having delivered an impressive 43.85% return over the past year.
Under the terms of the agreement, shares may be sold directly on the New York Stock Exchange or through other methods, including privately negotiated transactions, as determined by the company and the sales agents. The company also has the option to enter into forward stock purchase transactions with the forward purchasers. In these arrangements, the forward purchasers may borrow and sell shares to hedge their positions, and TXNM Energy may receive proceeds upon the physical settlement of these forward agreements.
The company will not receive proceeds from the sale of borrowed shares by the forward sellers. Proceeds will be received upon physical settlement of the forward agreements, based on the number of shares and the relevant forward sale price, subject to adjustments. TXNM Energy retains the right to choose between physical, cash, or net share settlement for these forward agreements, with different implications for proceeds or potential obligations.
Sales of shares, if any, will be made under the company’s registration statement on Form S-3ASR, which became effective on February 28, 2025, and a prospectus supplement dated August 15, 2025. The company is not obligated to sell any shares under the agreement and may terminate the agreement at any time with written notice. The sales agents will receive a commission of up to 2% of the gross sales price per share sold.
This information is based on a press release statement included in a filing with the Securities and Exchange Commission.
In other recent news, TXNM Energy reported its second-quarter earnings, which fell short of analyst expectations. The company posted adjusted earnings of $0.25 per share, significantly below the analyst consensus of $0.42. Despite this, revenue for the quarter was $502.42 million, surpassing the estimated $457.43 million and marking a 2.9% increase from the previous year’s $488.10 million. The earnings shortfall was attributed to merger-related costs and increased operating expenses, which weighed on the results. These developments are part of the company’s ongoing financial activities and strategic adjustments.
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