Duke Energy Corporation (NYSE: DUK) announced plans to offer $1 billion in convertible senior notes due 2029 through a private placement, according to a company statement released March 9.

The utility company also intends to grant initial purchasers an option to buy up to an additional $150 million of the convertible notes within 13 days of the initial issuance.

Duke Energy plans to use proceeds from the offering to repay $1.725 billion of its outstanding 4.125% Convertible Senior Notes due April 15, 2026, including applicable cash amounts upon conversion and for general corporate purposes.

The new convertible notes will be direct, unsecured obligations of Duke Energy. Holders can convert the notes under certain conditions and during specific periods. Interest will be paid semiannually. Upon conversion, Duke Energy will pay cash up to the principal amount and may deliver cash, common stock shares, or a combination for any remainder.

The final observation period for the existing convertible notes begins March 9, 2026. Duke Energy noted that holders employing convertible arbitrage strategies may close short positions in the company's common stock during this period, which could affect the stock price and the effective conversion price for the new notes.

The offering targets qualified institutional buyers under Rule 144A of the Securities Act of 1933. The convertible notes and any shares issuable upon conversion have not been registered under the Securities Act.

Duke Energy serves 8.7 million electric customers across North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, with 55,700 megawatts of energy capacity. Its natural gas utilities serve 1.8 million customers in five states.