NextEra Energy Inc.
) announced that it will sell 13 million equity units of $50 each
amounting to $650 million. The net proceed from the issue, after
underwriting expenses and offering expenses, is expected to be $630
million and will be added to the general funds of NextEra Energy
The contract stipulates that equity unitholders will have to
purchase NextEra Energy common stock within September 1, 2015, and
will receive a 5% undivided beneficial ownership interest in a
NextEra Energy Capital Holdings, Inc. debenture due September 1,
2017, to be issued in the principal amount of $1,000. The
debentures will be guaranteed by NextEra Energy Capital Holdings'
parent company, NextEra Energy, Inc.
The company from time to time issues equity units to meet its
financial needs. On May 1, 2012, the company had issued equity
units worth $600 million. We believe NextEra Energy is in urgent
need of funds because of its aggressive long-term growth strategy.
The capital raised will be used to modernize plants and augment the
smart grid initiative of the company. Besides, the company is also
investing heavily to increase its renewable energy generation form
solar and wind resources.
The debt-to-capital ratio of the company at the end of the second
quarter was 57.8%, up nominally from 57.5% at the end of the
preceding quarter. The ratio is also higher than the peer group
average of 42.7%. However, we believe NextEra's financial
strength and positive contribution from the new projects will allow
it to service its debts.
NextEra Energy expects full-year 2012 adjusted earnings per share
in the range of $4.35 to $4.65. The new capital investments are
expected to aid in earnings growth, going forward. The Zacks
Consensus Estimate for 2012 is $4.53 per share.
NextEra Energy currently retains a Zacks #3 Rank which translates
into a short-term Hold rating. The company competes with
Based in Juno Beach, Florida, NextEra Energy Inc., through its
subsidiaries, engages in the generation, transmission, distribution
and sale of electric energy in Florida.
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