NRG Energy, Inc.
) has announced initial public offering (IPO) of the Class A
common stock of its wholly-owned subsidiary NRG Yield, Inc. ("NRG
Yield"). The company filed for this IPO with the Securities and
Exchange Commission (SEC) on Jun 7, 2013.
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NRG Energy priced the offering of 19,575,000 shares of the Class
A common stock in the price band of $19.00 - $21.00 per share.
The Class A common stock of NRG Yield will trade on the New York
Stock Exchange under the symbol "NYLD."
NRG Energy will allow the underwriters of the issue a window of
30 days to purchase up to 2,936,250 shares of the Class A common
stock of the initial public offering to cover over-allotments, if
NRG Yield intends to utilize the net proceeds of this offering to
acquire a portion of the equity interest in NRG Yield LLC from
NRG Energy and for general corporate purposes. Currently, NRG
Energy's long-term debt-to-capitalization ratio is 58.8%, higher
than the peer group average of 44.7%. Post offering, the
company's long-term debt-to-capitalization ratio will decline.
NRG Yield is associated with renewable-energy business of NRG
Energy. The company will subsequently own solar, natural gas and
wind-fired generating assets.
We view NRG Energy as an organization with diversified
electricity generation facilities in terms of geography, fuel
type and dispatch levels. In addition, the company's strong
liquidity profile helps it to pursue an organic and inorganic
growth strategy, primarily to expand the solar asset portfolio.
NRG Energy currently has a Zacks Rank #2 (Buy). Other stocks in
the industry that are worth considering include
Companhia Paranaense de Energia
CPFL Energia S.A.
Integrys Energy Group, Inc.
), each with a Zacks Rank #1 (Strong Buy).