CMS Energy Corporation (NYSE: CMS), a company based in Jackson, Michigan, announced on June 4, 2025, the launch of a cash tender offer totalling $125 million for outstanding debt securities issued by its subsidiary Consumers Energy Company. The offer targets first mortgage bonds with maturities extending through 2060. It is subject to a series of conditions, including acceptance priority levels that will determine which bonds are purchased first.
Details of the repurchase offer
The offer will remain open until July 3, 2025, although an early payment is scheduled for bondholders who submit their securities before June 17, 2025. Investors tendering their bonds before this date will receive an additional payment, called the “Early Tender Payment”, on top of the standard purchase price.
Priority and acceptance conditions
According to the offer terms, bonds are subject to priority acceptance levels. Lower-priority securities may be subject to proration if demand exceeds the $125 million cap. The bonds concerned are from various series, with fixed interest rates ranging from 2.5% to 3.5% and extended maturity dates. For example, the 2.5% bond series maturing in 2060 carries the highest acceptance priority, followed by lower-priority series.
Features of the proposed bonds
CMS Energy reserves the right to adjust the amounts repurchased based on demand, although the company stated that there is no minimum submission condition required to accept the bonds.
Purpose of the operation
This operation comes as CMS Energy seeks to optimise the management of its long-term debt. It could also allow the company to reduce the average cost of its debt and better position its finances for the coming years.
