Alabama Power Company, a subsidiary of Southern Company (SO), announced its plan to redeem the company’s outstanding Senior Notes, due April 15, 2034.
Alabama Power intends to cash in $150,000,000 Series AA 5- 5/8% Senior Notes on October 29, 2010. The redemption price will be equal to 100% of the principal amount plus any accrued and unpaid interest to the date of redemption.
The Bank of New York Mellon Corporation (BK) will act as the redemption agent. The people in possession of the to-be-redeemed Series AA Senior Notes will receive a notice of redemption at least 30 days prior to the redemption date.
With headquarter in Atlanta, Georgia, Southern Company is a major energy company serving both regulated and competitive markets across the Southeastern, United States. It is a holding company for four regulated Southern electric utilities — Georgia Power, Alabama Power, Gulf Power and Mississippi Power.
We consider Southern to have a solid base of regulated utility assets that offers an above-average yield, prospective dividend growth, moderate capital appreciation potential and projected solid earnings growth over the next few years. We also remain impressed about the company’s improving balance sheet, impressive history of operating performance and sufficient levels of cash flow to support future capital expenditures.
Southern Company targets to invest approximately $16.4 billion over the next three-year period of 2010 – 2012. Most of the spending (more than 88%) will be contributed toward regulated businesses with a main focus on transmission, distribution and generation facilities.
With a large portion of its revenues generating from industrial customers, a sluggish economy severely affects the fortunes of Southern, as compared with peers. We believe that the hostile economic conditions and the slow pace of industrial recovery will continue to weigh down the company’s results, compelling us to reiterate our long-term Neutral rating.
With an apprehension that the company will perform below with the broader equity market over the next one to three months, we currently have a Zacks #4 Rank (Sell rating) on the stock.
SOUTHN COMPANY (SO): Free Stock Analysis Report
Zacks Investment Research
