Summary
This 8-K filing by NextEra Energy, Inc. (NEE) on October 5, 2015, details a significant financing event for its subsidiary, NextEra Energy Partners, LP (NEP). Specifically, on October 1, 2015, an indirect subsidiary of NEP secured $600 million in variable rate senior secured term loans maturing in October 2018. These loans are secured by assets of NEP OpCo and a subsidiary, and include financial covenants and distribution restrictions. The primary purpose of this debt issuance was to partially fund NEP's acquisition of NET Holdings Management, LLC, which owns a portfolio of seven contracted natural gas pipeline assets in Texas. While NEP and NEP OpCo are the primary obligors and guarantors, NEE itself does not guarantee these specific borrowings. This transaction highlights NEP's strategy to expand its portfolio of contracted energy infrastructure assets.
Key Highlights
- 1NextEra Energy Partners, LP (NEP), an indirect subsidiary of NEE, obtained $600 million in senior secured term loans.
- 2The term loans are variable rate, based on LIBOR plus a margin, and mature in October 2018.
- 3Proceeds were used to partially fund NEP's acquisition of NET Holdings Management, LLC, which holds seven contracted natural gas pipeline assets in Texas.
- 4The loans are secured by specific assets of NEP OpCo and one of its direct subsidiaries.
- 5NEP and NEP OpCo are the guarantors of the debt; NEE is not a guarantor.
- 6The loan agreements include financial covenants and restrictions on cash distributions to equity holders for NEP OpCo and its subsidiaries.