8-KFinancial Events

NEXTERA ENERGY INC 8-K Report, Financial Obligation (Dec 17, 2013)

Filed December 17, 2013For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

This 8-K filing from NextEra Energy, Inc. (NEE) reports on two significant financial events occurring on December 12, 2013. Firstly, NextEra Energy Capital Holdings, Inc. (NEECH), a subsidiary, entered into a new, larger three-year revolving credit agreement for up to $750 million, replacing a $500 million facility. This enhanced credit line is available for general corporate purposes and is subject to NEE maintaining a specific funded debt to total capitalization ratio, with NEE providing a guarantee. Secondly, Trillium Windpower, LP, an indirect subsidiary, issued approximately C$315 million (US$296 million) in 5.803% senior secured amortizing notes due in 2033. The proceeds were used to partially repay construction loans for two wind generating facilities in Ontario, Canada, totaling approximately 147 megawatts. NEECH provided a guarantee for certain outstanding construction costs and spare parts until mid-2014, with NEE also guaranteeing NEECH's obligations. These notes are secured by the assets of the wind facilities.

Key Highlights

  • 1NextEra Energy Capital Holdings, Inc. (NEECH) secured a new $750 million, three-year revolving credit facility, increasing its borrowing capacity by $250 million.
  • 2The new credit agreement replaces a previous $500 million facility that expired on December 10, 2013.
  • 3The credit facility is available for NEECH's general corporate purposes.
  • 4NEE provides a guarantee for NEECH's obligations under the new credit agreement.
  • 5An indirect subsidiary, Trillium Windpower, LP, issued C$315 million (US$296 million) of 5.803% senior secured notes maturing in February 2033.
  • 6Proceeds from the notes will be used to partially repay construction loans for 147 MW of wind generating facilities in Ontario, Canada.
  • 7NEECH and NEE provided guarantees for certain construction-related obligations associated with the Ontario wind projects, which are expected to be satisfied by mid-2014.

Frequently Asked Questions

The new $750 million revolving credit agreement provides NextEra Energy Capital Holdings, Inc. with increased financial flexibility and a larger pool of funds for general corporate purposes, demonstrating the company's continued access to credit markets.

Trillium Windpower, LP issued C$315 million (US$296 million) in 5.803% limited-recourse senior secured amortizing notes maturing in February 2033. These notes are secured by the assets of the wind generating facilities in Ontario, Canada.

The debt is issued by a subsidiary and is secured by specific project assets. While NEECH and NEE provide guarantees for certain obligations, the primary recourse for the notes is to the project's assets. This structure allows for financing of renewable energy projects while potentially isolating some of the financial risk.

Yes, the new credit agreement requires NEE to maintain a specific funded debt to total capitalization ratio, and failure to do so could lead to default. The trust indenture for the Trillium notes also contains default provisions related to payment failures, covenant breaches, and certain events concerning the project or related agreements.