Analysis XEL
Why Xcel's $2 billion convertible plan still needs cash
Xcel proposed $2 billion of convertible notes after opening a $6 billion stock-sale program. The documents show why debt repayment and equity funding are different tasks.
Ticker Byline
Xcel Energy Inc.
Xcel Energy operates regulated electric and gas utilities across eight states. Its convertible debt proposal, equity sale capacity and outstanding forward agreements serve different parts of a large investment funding plan.
- Ticker
- XEL
- Exchange
- XNAS
- SEC CIK
- 0000072903
Xcel Energy Inc. (Nasdaq: XEL) supplies electricity and natural gas through regulated utilities in eight states. Its investment plans cover generation, transmission and distribution. The common stock trades as XEL; XELLL is a separate junior note security.
Financing announced in late October and November
The November 2 proposal covers $2 billion of convertible senior notes due in 2027, plus a $300 million purchaser option. Proceeds are intended to repay short-term borrowing, including commercial paper and part of a 364-day term loan, and support general corporate purposes.
On conversion, the original amount borrowed, or principal, would be paid in cash. Only value above principal could be settled in cash, shares or both. The proposal left interest and initial conversion-price terms to pricing.
On October 30, Xcel created a new $6 billion share-sale program and terminated its May program, which had $448.6 million unused. Older forward agreements covering approximately $3.8 billion and $2.2 billion in aggregate offering prices remained outstanding. These are separate from the new program’s capacity.
September-quarter results
Amounts are USD millions except diluted earnings per share, for the three months ended September 30. Ongoing earnings exclude specified nonrecurring items, principally the wildfire litigation charges in this quarterly comparison.
| Group results | 2026 | 2025 |
|---|---|---|
| Operating revenue | 4,172 | 3,915 |
| GAAP net income | 960 | 524 |
| Ongoing net earnings | 961 | 737 |
| GAAP diluted earnings per share | $1.52 | $0.88 |
| Ongoing diluted earnings per share | $1.52 | $1.24 |
The year-earlier quarter includes a $287 million pretax Marshall Wildfire litigation charge in 2025. Investment recovery, equity-method earnings and warmer weather helped 2026 results, while financing costs rose.
On October 29, Xcel narrowed 2026 ongoing earnings guidance to $4.10 to $4.16 per share from July’s $4.04 to $4.16 range. It introduced a 2027 range of $4.48 to $4.62.
Cash and the five-year buildout
Operating cash flow for the nine months ended September 30 was $4.868 billion, versus $3.874 billion. Wildfire insurance reimbursements helped the increase. Capital and construction spending was $9.255 billion, versus $7.470 billion.
At September 30, cash was $2.483 billion, versus $274 million at December 31, 2025. The carrying amount of short-term borrowing and current and long-term debt was $40.598 billion, versus $33.883 billion.
The $70 billion base capital forecast for 2027 through 2031 is funded in the plan by $35.81 billion of operating cash net of dividends and pension funding, $26.19 billion of new debt net of refinancing, and $8 billion of equity financing, potentially including instruments with rating-agency equity credit. Separately, $5.63 billion of debt matures during the period.
Future filings can show how much share-sale capacity converts into cash, how the earlier forward agreements settle and how investment recovery compares with financing costs.
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