New NextEra Energy Baby Bonds Sets Back a Bit

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).

Info on the new issue is here.

The new issue carries an investment grade as you would expect from the largest utility in the world.

21 thoughts on “New NextEra Energy Baby Bonds Sets Back a Bit”

  1. Please “note” the Nextera Energy 5.65% Debentures due 3/1/79 are higher on the credit stack than a normal preferred and this debt security should run up into the first EX date 5/30/19 and pay date 6/3/19.
    But people are oceans. You cannot know them by their surface, Nomad

    1. Nomad, I think you are correct on the run up. Sister pfds are all yielding 5.20 or under with near identical terms/covenants/stack placement. As it’s math-day here: div/yield=price (1.4125/0.0520=27.16). When the NEE-N’s superior yield is more plainly visible I think we’ll see some movement. Course, the sisters could make a run toward NEE-N and equalize – though until they have parity I’m holding.

  2. FYI: For those looking at CN pref shares:
    04/01/2019 14:55:19 FOREIGN TAX WITHHELD (ALTGF)
    Right off the TDAM Transactions Statement, approx 13%.
    JA

    1. Same here Joel – mine is TDAM, IRA, and they did not do that on the EBBNF dividend. Sold the ALTGF this morning at $19.20 – small gain plus the divvy – don’t feel like fighting them but I don’t know what the difference is. Thought I was home-free after the EBBNF came through.

      1. Tim, I think its an issue with grey market issues…The “pink sheet” OTC issues such as the Enbridge and Fortis issues I have had no problem with. ERRAF is a grey market issue and another guy bite on TDs ankles until they corrected the problem for us. They originally wanted no ownership in the problem. I am waiting for next divi to see if the same problem pops up again.
        I finished up today buying up the rest of my half of EBBNF at 19.74 I flipped at $20.60 a while back. I have way too much Enbridge preferreds in 3 issues..
        Went back into NI-B at 26.33 today. Flipped that for $2, and about 50 cents two other times…I need to reestablish my position now that it is lower again, though I am unimpressed with current price.
        I bought a nice stash of SOCGP couple days ago at $28 and people were buying over $29 today…Crazy….No plans to flip though as I like a few perpetual noncallables in the fold.

    2. Joel, I never did the withhold math on my Alta in taxable. Just assumed it would be 15%. Oddly enough in VG it was right about 13% also.

        1. Hi mikeo,

          I am with Schwab and I just calculated my withholding for Alta gas and it was 13%. Just like my JE – A. This is in my trust account. I’m not sure why you’re showing 15%.

        2. Am I losing my mind?
          BKFAF Interest Paid: $90.43
          BKFAF Foreign Tax Paid: -$13.56
          My 1950s era math tells me to divide 13.56 by 90.43 = 14.995%
          Ia that not correct?

          1. Nope.

            Add $90.43 to $13.56 and then divide the total into $13.56. So, $13.56 divided by $103.99 is 13%. You got $103.99 and of that, they taxed you $13.56.

              1. Thanks for the assistance Amy.

                But my statement clearly shows I received $90.43 not $103.99. Talking to Schwab confirmed I received $90.43 not $103.99. The 15% tax was taken from $90.43 yielding a net of $$76.87.

                1. Ok, Mikeo, Im sending you all my bills to pay for me as you can “do the math”. I assumed as law stated it was 15% withheld until I started figuring. I should have just stuck to assuming as it was correct. I was interpreting like Amy when I looked at it. When doing it your way, it clearly is 15% withheld on the nose. I thought the way it was presented the dividend was net too, but clearly you are correct. It has to be 15% because that is the Canadian govt withholding.

                  1. Geez, Grid, I guess that you and I have to go back to basic math class and Mikeo can be our teacher. At least I feel in good company with you also misinterpreting it like I did.

                    Sorry, Mikeo! The brain is getting old…..

                    1. Amy, they could present the information in a more cogent manner.
                      The way mine is presented it intuitively looks like the withholding occured and thus leaving the dividend posted as the net not gross. Oh well, more money back when I file my taxes next year.

      1. My JE-A also has 13% held back. They were holding back 20% until I filled out the Canadian tax treaty form for Schwab. I wish Schwab would’ve alerted me to the necessity to fill that form out to get the better withholding.

      1. I put in a buy order for more NEE-N at $25.32, but was filled on only 47 shares!!

        If the price pulls back to morrow or in the near future, I will complete the buy, then look to sell at around $25.50 as Tim says.

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