Business Context and Reporting Period
This Form 8-K, dated February 20, 2026, is a combined filing by The Southern Company (parent), Alabama Power Company, and Georgia Power Company. The report details the entry into material definitive agreements under the U.S. Department of Energy (DOE) Loan Guarantee Program (Title XVII) to finance eligible energy infrastructure projects.
Key Financial Metrics and Obligations
- Alabama Power Credit Facility: Maximum aggregate advances of approximately $4.1 billion.
- Georgia Power Credit Facility: Maximum aggregate advances of approximately $22.4 billion.
- Initial Funding: Georgia Power requested initial advances of approximately $1.0 billion on February 20, 2026, with receipt expected in March 2026. No initial advance was requested by Alabama Power at the time of filing.
- Interest Rate: Applicable U.S. Treasury rate plus a spread of 0.375%.
- Maturity: Final scheduled maturity date for all borrowings is December 10, 2055.
- Issuance Costs: Alabama Power incurred approximately $10 million; Georgia Power incurred approximately $29 million.
- Repayment Structure: Principal repayments begin in 2053 for Alabama Power (3 installments) and 2049 for Georgia Power (7 installments).
Material Changes and Agreements
On February 20, 2026, Alabama Power and Georgia Power entered into Loan Guarantee Agreements (LGAs) with the DOE and Note Purchase Agreements with the Federal Financing Bank (FFB). These agreements establish multi-advance term loan facilities. Proceeds are restricted to reimbursing up to 80% of eligible project costs, including new gas units, transmission upgrades, battery storage, nuclear upgrades, and coal-to-gas conversions. The Southern Company is not a party to these agreements and has no obligations under them.
Outlook, Risks, and Covenants
- Availability Period: Borrowers may request advances until the earliest of September 15, 2033, the exhaustion of the maximum facility amount, or an event of default. Alabama Power must request an initial advance by February 20, 2031, or the facility terminates.
- Covenants: Borrowers must maintain investment-grade credit ratings from at least two agencies, comply with federal laws (including Davis-Bacon and Cargo Preference Acts), and adhere to restrictions on liens and fundamental changes.
- Events of Default: Include payment failures, bankruptcy, cross-defaults, and failure to comply with DOE Program Requirements. Default allows the DOE to declare all outstanding amounts immediately due.
- Mandatory Prepayments: Required if eligible projects cease to be eligible, if project costs recoverable in rates fall below 95% of advances (tested on the third anniversary of the availability period termination), or upon a change of control.
Investor Verification Checklist
- Verify the specific "eligible projects" designated for the $1.0 billion initial advance by Georgia Power.
- Confirm the credit rating status of Alabama Power and Georgia Power to ensure compliance with the borrowing conditions.
- Monitor the timeline for Alabama Power's initial advance request, which must occur by February 20, 2031.
- Review the amortization schedules for the $10 million and $29 million issuance costs.
- Assess the impact of the 95% cost recovery threshold on potential mandatory prepayment obligations.