CenterPoint Energy Announces Pricing of $600 Million Convertible Senior Notes Offering, Expands from $550 Million to Strengthen Corporate Liquidity and Debt Structure
CenterPoint Energy, Inc., a leading U.S.-based energy delivery company, today announced the pricing of its offering of $600 million aggregate principal amount of 2.875% Convertible Senior Notes due 2029. This offering, structured as a private placement, targets persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The company increased the size of the offering from its initially announced $550 million, reflecting strong investor demand and market confidence in CenterPoint’s long-term financial strategy.
In connection with the offering, CenterPoint granted the initial purchasers the option to purchase up to an additional $50 million aggregate principal amount of convertible notes, with settlement to occur within a 13-day period starting on the date of initial issuance. The offering is expected to close on February 26, 2026, further bolstering the company’s financial flexibility.
Structure and Terms of the Convertible Notes
The convertible notes will constitute senior, unsecured obligations of CenterPoint Energy and will mature on May 15, 2029, unless converted or repurchased earlier under specified terms. The notes carry an interest rate of 2.875% per year, payable semiannually in arrears on May 15 and November 15, beginning November 15, 2026.
The convertible notes feature conditional convertibility before February 15, 2029, allowing conversion only upon the occurrence of specific events or during designated periods. After that date, holders may convert the notes at their discretion, in whole or in part, until the close of business on the second scheduled trading day before maturity. Upon conversion, CenterPoint will pay cash up to the aggregate principal amount being converted, with the remaining conversion obligation—if any—settled either in cash, shares of CenterPoint common stock (par value $0.01 per share), or a combination thereof, at the company’s discretion. Importantly, the notes are not subject to redemption prior to maturity, giving investors certainty regarding the note’s life and interest payments.
The initial conversion rate has been set at 18.6524 shares of common stock per $1,000 principal amount of the notes, which corresponds to an initial conversion price of approximately $53.61 per share. This conversion rate, and the associated conversion price, may be adjusted under certain circumstances, though adjustments will not apply to accrued and unpaid interest.
Use of Proceeds and Financial Strategy
CenterPoint anticipates that the net proceeds from this convertible notes offering will amount to approximately $592.1 million after deducting initial purchasers’ discounts, commissions, and offering expenses. If the full $50 million option to purchase additional notes is exercised, net proceeds could rise to approximately $641.5 million. The company intends to deploy these proceeds for general corporate purposes, including repayment of a portion of outstanding commercial paper and other corporate debt, further optimizing its capital structure and managing interest expense.
The offering represents a strategic financial initiative for CenterPoint, providing the company with additional liquidity and strengthening its balance sheet. By issuing convertible notes at favorable terms, CenterPoint aims to maintain financial flexibility while minimizing dilution risk to existing shareholders. The relatively low interest rate on these notes highlights investor confidence in the company’s creditworthiness and long-term growth potential.
Investor Considerations and Regulatory Compliance
The convertible notes, along with any common stock issuable upon conversion, are offered and sold exclusively to qualified institutional buyers within the United States under Rule 144A. The offering has not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. without appropriate registration or an exemption from registration requirements. Accordingly, this press release does not constitute an offer to sell or a solicitation to purchase the securities in any jurisdiction where such an offer would be prohibited under law.
The structure of the convertible notes ensures alignment of interests between the company and investors. By tying part of the return potential to the company’s stock performance, investors benefit from potential appreciation in CenterPoint’s common stock while receiving fixed interest payments, combining debt-like stability with equity-like upside. The optionality for CenterPoint to settle part of the conversion in cash, shares, or a combination of both also provides the company with flexibility to manage balance sheet and equity dilution considerations effectively.
About CenterPoint Energy
CenterPoint Energy, Inc., headquartered in Houston, Texas, is the only investor-owned electric and gas utility based in Texas and serves as a critical energy delivery company across the United States. The company operates electric transmission and distribution, power generation, and natural gas distribution businesses, serving more than 7 million metered customers in Indiana, Minnesota, Ohio, and Texas.
As of December 31, 2025, CenterPoint’s total assets were approximately $46.5 billion, reflecting a long history of investment in infrastructure, operational expansion, and technology-driven initiatives designed to improve efficiency and reliability for its customers. The company employs roughly 8,800 people and draws on over 150 years of experience through CenterPoint and its predecessor entities.
CenterPoint has consistently demonstrated its commitment to providing safe, reliable, and sustainable energy solutions to the communities it serves. The company’s portfolio of operations reflects a diversified energy strategy, including both regulated utility operations and competitive energy services, allowing it to maintain resilience across market cycles. CenterPoint’s extensive electric and natural gas infrastructure positions it to support growing demand in its markets while delivering long-term value to shareholders.
Strategic Implications of the Convertible Notes Offering
The offering of these convertible notes is part of CenterPoint’s broader strategy to optimize its capital structure, reduce borrowing costs, and maintain a high degree of financial flexibility. By accessing the private placement market through Rule 144A, the company can efficiently raise significant capital while limiting public market volatility exposure and minimizing immediate shareholder dilution.
Convertible notes are particularly attractive in this context because they allow the company to secure capital at a lower interest rate than traditional debt, due to the embedded equity conversion feature. Investors receive the benefit of potential upside through conversion into CenterPoint stock, while the company gains the flexibility to defer dilution until conversion occurs. This structure balances the interests of both investors and the company and demonstrates CenterPoint’s disciplined approach to corporate finance.
Furthermore, the ability of the initial purchasers to exercise the option for an additional $50 million of convertible notes indicates strong institutional demand and confidence in CenterPoint’s long-term strategy. This over-allotment option provides the company with the potential to raise additional capital if market conditions remain favorable, further enhancing financial flexibility.
Risk Management and Governance
CenterPoint’s decision to issue senior, unsecured convertible notes reflects a careful approach to capital allocation and risk management. Senior debt status ensures that noteholders have a claim on assets ahead of subordinated debt, which can enhance investor confidence. The lack of redemption prior to maturity removes uncertainty regarding early cash outflows for interest and principal repayment, allowing the company to better plan its financial operations.
From a corporate governance perspective, the offering demonstrates CenterPoint’s commitment to transparency and adherence to regulatory requirements. By limiting the sale to qualified institutional buyers and providing comprehensive disclosure regarding terms, risks, and use of proceeds, the company aligns with best practices in investor relations and regulatory compliance.
Market Context and Outlook
The energy sector, particularly utilities, has experienced substantial market attention due to rising energy demand, increasing regulatory focus on sustainability, and evolving customer expectations for reliable and affordable energy delivery. CenterPoint’s strategic investments in infrastructure, combined with disciplined financial management, position the company to navigate these dynamics effectively.
By issuing convertible notes, CenterPoint is taking advantage of favorable market conditions characterized by low interest rates and strong investor appetite for hybrid instruments combining fixed income and equity characteristics. This approach not only strengthens the company’s liquidity position but also provides additional financial flexibility to pursue operational investments, technology upgrades, and strategic initiatives aimed at long-term growth and shareholder value creation.
