Terms

Series

Series C Cumulative Redeemable Perpetual Preferred Stock

Liquidation Preference

$25.00

Rate Type

Fixed

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

July 15, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Liabilities Of Cms Energy Corporation, All Existing And Future Indebtedness And Other Liabilities Of Subsidiaries (Structural Subordination), Senior Stock (Any Future Capital Stock Expressly Ranking Senior); Pari Passu With: Parity Stock (Any Future Capital Stock Expressly Ranking On Parity); Senior To: Common Stock, Junior Stock (Any Future Capital Stock Ranking Junior)

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Prospectus Summary

CMS Energy Corporation is offering depositary shares, each representing a 1/1,000th interest in a share of its Series C Cumulative Redeemable Perpetual Preferred Stock, with a liquidation preference equivalent to $25.00 per depositary share. The coupon rate was not yet set at the time of the preliminary filing. Dividends are paid quarterly on January 15, April 15, July 15, and October 15, commencing October 15, 2021. This series is cumulative, meaning any dividends not declared or paid in a given period will accumulate and must be paid in full before any dividends can be paid on the common stock or other junior securities. CMS may redeem the shares at $25.00 per depositary share on or after July 15, 2026. The Series C Preferred Stock ranks senior to CMS Energy's common stock and any future junior capital stock, and on parity with any future expressly designated parity stock. It sits junior to all existing and future debt and liabilities of CMS Energy Corporation itself — approximately $4.1 billion as of March 31, 2021. Importantly, as a holding company issue, this preferred is also structurally subordinated to approximately $11.0 billion of debt and liabilities at the subsidiary level; subsidiary creditors are paid from subsidiary assets before preferred holders can make any claim. In addition to the standard optional redemption, CMS may redeem the entire series within 120 days of a Ratings Event — a change in how a rating agency classifies the equity credit of the preferred — allowing the company to retire the securities if they lose their intended regulatory or ratings-based capital treatment. Dividends will be paid quarterly at a fixed rate (to be determined at pricing) on the $25.00 liquidation preference per depositary share. For U.S. individual holders, dividends are expected to qualify as qualified dividend income (QDI) subject to the preferential 15%/20% federal tax rate, provided applicable holding period requirements are met. U.S. corporate holders should generally be eligible for the dividends-received deduction (DRD), subject to standard limitations. The prospectus does not specify a fixed record date interval in the excerpted sections. If Series C Preferred dividends are in arrears, CMS Energy's ability to pay dividends on common stock and junior securities is blocked until all accumulated dividends are brought current.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If declared dividends on the Series C Preferred Stock are unpaid or in arrears, CMS Energy is generally prohibited from paying dividends on or repurchasing its common stock or other junior securities until all accumulated and unpaid preferred dividends have been paid.

Other Preferreds from CMS Energy Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 51 (Average)