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NextEra Energy to Raise Funds & Invest in Energy Projects

NextEra Energy, Inc.NEE intends to raise around $700 million of funds through the sale of its equity units. The common units, priced at $50 each, will be sold to Barclays PLC BCS , Wells Fargo Securities and Mizuho Securities. The transaction is likely to close by Sep 16.

Each unit will comprise a contract to buy NextEra Energy common stock in the future (which shall be completed by Sep 8, 2018) and a 5% undivided beneficial ownership interest in certain debt of its wholly owned business wing - NextEra Energy Capital Holdings, Inc. This subsidiary owns and provides funds for NextEra Energy Resources LLC and other operating subsidiaries apart from Florida Power & Light Company and its subsidiaries.

Total distributions on the equity units will be at the rate of 6.371% annually. Interest on the debentures and payments under the stock purchase contracts will be contained in the rate.

The net proceeds from the transaction will be added to the general funds of NextEra Energy Capital Holdings. Meanwhile, the funds being raised, estimated at $693 million (after deducting the underwriting discount), is intended to be invested in energy and power projects.

NextEra Energy Partners, LP NEP , a limited partnership formed by NextEra Energy, also announced the pricing of an underwritten public offering comprising 8 million common units at $26 per unit. A gross proceed of $208 million from the public offering is intended to be utilized to repay amounts owed under a $313 million term loan.

At the end of the second quarter of 2015, NextEra Energy has 449 million shares outstanding. The company had a cash balance of $551 million as of Jun 30, 2015.

NextEra Energy has been consistently investing in various energy projects including renewable energy. The company exited the second quarter with a contracted renewable backlog of 3,100 megawatt. NextEra Energy is also avidly spending in combined-cycle natural gas generation modernization projects due to its efficiency in producing energy.

NextEra Energy is currently favorably placed with a Zacks Rank #2 (Buy). Another electric utility worth considering is Brookfield Infrastructure Partners L.P. BIP . Brookfield Infrastructure currently sports a Zacks Rank #1 (Strong Buy).

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NEXTERA ENERGY (NEE): Free Stock Analysis Report

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BROOKFIELD INFR (BIP): Free Stock Analysis Report

NEXTERA ENERGY (NEP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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