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PNM Resources (PNM) to Issue 5.4M Equity to Repay Debts

Zacks Equity Research

PNM Resources PNM has priced its public offering of 5.375 million shares of common stock at $47.21 per share, subject to certain adjustments, upon physical settlement of the forward sale agreements. The gross proceeds from the issue are expected to be $260.7 million. The offering was upsized from the previously announced offering of 4.9-million shares of common stock. Closing of the offering is expected on or about Jan 10, 2020, subject to customary closing conditions.

PNM Resources granted underwriters an option to purchase up to 806,250 additional shares of its common stock within 30 days. The company expects to use the net proceeds for general corporate purposes, which may include repayment of borrowings under its unsecured revolving credit facility or other debt.

Long-Term Plans

PNM Resources has plans to invest $3.3 billion over the 2020-2023 time period to strengthen existing operations. In addition to utilizing funds generated from internal sources, the company intends to issue equity shares for a total value of $590 million to fund long-term capital expenditures.

The company will also take advantage of the prevailing low-interest environment to issue $800-million debt by 2023 to fund capital expenditure plans. These planned investments are expected to result in rate-based compound annual growth of 9.6% over the same period.

Emission-Reduction Plans

Majority of the companies operating in the Utility space have taken initiatives to cut down emissions from their generation portfolio and become emission free. PNM Resources plans to become coal free by 2031 and emission free within 2040.

Other utilities like Dominion Energy D, NextEra Energy NEE and Xcel Energy XEL are consistently undertaking efforts to reduce carbon footprint. In addition, other utility companies are striving to reduce emissions, and utilize more renewable and clean energy sources like solar, wind, hydro-power or geo-thermal for electricity generation.

Price Movement

In the past 24 months, PNM Resources’ shares have returned 29.7%, outperforming its industry’s growth of 17.6%.



Zacks Rank

PNM Resources currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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