CMS Energy upsizes convertible notes offering to $850 million

CMS Energy Corporation (NYSE: CMS) priced an offering of $850 million in 3.125% convertible senior notes due 2031, the Michigan-based energy company announced. The offering was increased from the previously announced $750 million aggregate principal amount.

The company granted initial purchasers an option to buy up to an additional $150 million of the convertible notes within 13 days of issuance. The sale is expected to close November 6, 2025, subject to customary closing conditions.

CMS Energy expects net proceeds of approximately $839.3 million, or $987.7 million if the purchasers exercise their full option, after deducting discounts and estimated expenses. The company plans to use proceeds to retire its 3.60% Senior Notes due November 15, 2025, which have $250 million in aggregate principal amount outstanding, with the remainder for general corporate purposes.

The convertible notes will mature May 1, 2031, unless earlier converted, redeemed or repurchased. They will bear interest at 3.125% annually, payable semiannually beginning May 1, 2026.

The initial conversion rate is 11.0360 shares per $1,000 principal amount, equivalent to approximately $90.61 per share. This represents a 25% premium over CMS Energy's common stock closing price on the New York Stock Exchange on November 3, 2025.

Prior to February 1, 2031, the notes will be convertible only under certain conditions. After that date, holders may convert at any time until maturity. CMS Energy may not redeem the notes before May 7, 2029.

The offering is being made to qualified institutional buyers under Rule 144A in a private placement under the Securities Act of 1933. CMS Energy operates primarily through Consumers Energy Company, an electric and gas utility, and owns independent power generation businesses.

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