Xcel Energy Inc. announced a cash tender offer to buy back up to $345 million of first‑mortgage bonds issued by its wholly owned subsidiary, Northern States Power Company. The offer, which expires on December 19 2025, allows bondholders to tender their securities for cash and accrued interest, with settlement scheduled for December 24 2025.
The tender offer is part of Xcel’s broader strategy to strengthen its capital structure as it pursues a $60 billion capital investment plan for 2026‑2030. By reducing the outstanding debt of its subsidiary, Xcel can lower future interest expense, improve credit metrics, and free cash flow that will support new transmission, generation, and distribution projects.
Xcel’s Q3 2025 earnings report showed GAAP diluted earnings per share of $0.88 versus $1.21 in Q3 2024, while ongoing EPS stood at $1.24 compared with $1.25 in the prior year. The company reaffirmed its 2025 EPS guidance and issued 2026 guidance, signaling confidence in its earnings trajectory despite a modest decline in GAAP EPS.
The company’s debt profile remains a key focus. Prior to the tender offer, Xcel’s net debt to EBITDA ratio stood at 5.1 and its interest coverage ratio was 2.4 times. Repurchasing $345 million of bonds is expected to lower the net debt level and improve the interest coverage ratio, thereby enhancing the company’s ability to finance its $60 billion investment plan without diluting equity.
Management emphasized that the tender offer aligns with its commitment to keep customer bills low while modernizing the grid. CEO Bob Frenzel noted that the company is “continuing to strive to ensure we keep customer bills as low as possible as we modernize and expand our country’s energy infrastructure.” The move also reflects the company’s proactive stance in a high‑interest‑rate environment, where reducing debt can mitigate the impact of rising borrowing costs.
The tender offer follows a similar $110 million cash tender announced in December 2024, underscoring Xcel’s ongoing strategy to manage its debt profile. The company has also issued $900 million in junior subordinated notes earlier in 2025, indicating a balanced approach to capital markets activity.
Analysts view the tender offer as a positive step toward improving Xcel’s leverage metrics, though the company’s net debt to EBITDA ratio remains above industry peers. The move is expected to support the company’s long‑term growth objectives, including a projected EPS growth of 6‑8 % and dividend growth of 4‑6 % over the next few years.
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