The new baby bonds from energy giant NextEra Energy (NYSE:NEE), which carries a decent coupon of 5.65%, have set back a percent this week.
Originally the bonds sprinted higher to $25.52, but yesterday were back down into the $25.20’s.
We had originally purchased a large position in this issue and left go of some of it at $25.50–keeping a portion for the ‘sock drawer’. We re-entered this morning again and are hoping to sell this portion when the issue reaches what we believe to be fair value ($25.50-$25.75).
The very similar baby bond from NextEra with a coupon of 5.25% is trading at $25.22 (NEE-K) which would imply that the new issue has plenty of upside (2% or so).
The new issue carries an investment grade as you would expect from the largest utility in the world.