Summary
This 8-K filing from NextEra Energy, Inc. (NEE) on September 29, 2017, details a significant financing transaction by its wholly-owned subsidiary, NextEra Energy Capital Holdings, Inc. (NEECH). NEECH successfully issued $755 million in Series L Junior Subordinated Debentures due in 2057, carrying an annual interest rate of 5.11% payable semi-annually. A key feature for investors to note is the debentures' flexibility for NEECH, allowing for the deferral of interest payments for up to 10 consecutive years per deferral period, subject to certain restrictions. These debentures are redeemable at NEECH's discretion starting in September 2022, at 100% of the principal amount plus accrued interest. Importantly, NEE provides an unconditional and irrevocable subordinated guarantee for these debentures. However, both NEECH's and NEE's obligations are unsecured and subordinated to their respective senior indebtedness. This issuance represents a strategic move by NEECH to secure long-term funding, with implications for the company's capital structure and financial flexibility.
Key Highlights
- 1NextEra Energy Capital Holdings, Inc. (NEECH), a subsidiary of NEE, issued $755 million in Series L Junior Subordinated Debentures.
- 2The debentures mature on September 29, 2057, and carry a fixed interest rate of 5.11% per annum, paid semi-annually.
- 3NEECH has the option to defer interest payments for up to 10 consecutive years per deferral period, subject to specific conditions.
- 4The debentures are redeemable by NEECH on or after September 29, 2022, at 100% of the principal amount plus accrued interest.
- 5NextEra Energy, Inc. (NEE) provides a subordinated, unsecured guarantee for the debentures.
- 6The obligations under the debentures and guarantee are subordinated to existing senior indebtedness of both NEECH and NEE.