Electric utility NextEra Energy Inc. (NEE) announced that it will raise $350 million by selling equities to Credit Suisse Securities (USA) LLC. NextEra has also provided an option to Credit Suisse Securities (USA) LLC to purchase an additional $52.5 million of equity units to cover over-allotments.
The units are priced at $50 each and are bound by a contract to purchase NextEra Energy common stock in the future and a 1/20th, or 5%, undivided beneficial ownership interest in an FPL Group Capital Inc. debenture due September 1, 2015, in the principal amount of $1,000. These debentures were guaranteed by NextEra Energy.
The net proceeds from the sale of equities will be added to FPL Group Capital’s general funds, which is a unit of NextEra Energy. The company intends to deploy its general funds for investments in power projects and for other general corporate purposes, including the repayment of existing debts.
The total annual distribution rate on the equity units will be 7%, consisting of interest on the debentures and payments under the stock purchase contracts. The transaction is expected to close on September 21, 2010. Earlier, in May 2009, the company made a similar issue of equity units worth $350 million, which had an annual distribution rate of 8.375%.
The adjusted earnings of NextEra at the end of second-quarter 2010 were $1.11 per share, compared with 99 cents in the year-ago comparable period. The Zacks Consensus Estimates for third quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are $1.43 per share, $4.37 per share and $4.55 per share, respectively.
NextEra Energy currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain a Neutral rating on the stock.
Based in Juno Beach, Florida, NextEra Energy through its subsidiaries engages in the generation, transmission, distribution and sale of electric energy in the United States and Canada.
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