NextEra Energy Capital to Sell Baby Bonds

Massive utility company NextEra (NYSE:NEE) will sell a new issue of subordinated debentures in the form of $25 baby bonds.

Pricing has not been as of yet set although the issue is strongly investment grade and we expect the coupon to come in at 5.125 or 5.25%.

As is pretty typical of the utility baby bonds they have a maturity way out in 2079.

Also typical of baby bonds from utilities is that the issue has a “deferment” clause which allows the utility to defer interest payment for 1 or more occasions for up to 10 consecutive years per deferment period.

Preliminary filings can be seen here.

12 thoughts on “NextEra Energy Capital to Sell Baby Bonds”

  1. Issuer: NextEra Energy Capital Holdings, Inc.
    Designation: Series N Junior Subordinated Debentures due March 1, 2079
    Registration Format: SEC Registered
    Principal Amount: $600,000,000
    Over-allotment Option: Underwriters’ option to purchase, and settle concurrently on the
    Settlement Date set forth below, up to an additional $90,000,000
    principal amount of the Series N Junior Subordinated Debentures
    due March 1, 2079 from the Issuer, at the Purchase Prices set forth
    below.
    Date of Maturity: March 1, 2079
    Interest Payment Dates: Quarterly in arrears on March 1, June 1, September 1 and
    December 1 beginning June 1, 2019
    Coupon Rate: 5.650%
    Optional Deferral: Maximum of 10 consecutive years per deferral
    Price to Public: $25.00 per security
    Purchase Price: $24.2125 per security
    $24.50 per security (for sales to institutions)
    Trade Date: March 6, 2019
    Settlement Date:* March 15, 2019
    Listing: Intend to apply to list on NYSE; if approved for listing, trading
    expected to begin within 30 days of issuance.
    Optional Redemption: Redeemable at any time on or after June 15, 2024 at 100% of the
    principal amount plus any accrued and unpaid interest.
    Call for Tax Event: Prior to June 15, 2024, at any time at 100% of the principal amount
    plus any accrued and unpaid interest.
    Call for Rating Agency Event: Prior to June 15, 2024, at any time at 102% of the principal amount
    plus any accrued and unpaid interest.
    CUSIP / ISIN Number: 65339K 860/ US65339K8606
    Expected Credit Ratings:**
    Moody’s Investors Service Inc. “Baa2” (stable)
    S&P Global Ratings “BBB” (stable)
    Fitch Ratings “BBB” (stable)

    1. Hoping the OTC symbol will be available soon so purchase can be made prior to exchange listing. Reader ‘George ‘displayed all data above.

  3. I retired from NextEra Energy. 38 years of service. Expect it to be a low coupon, but extremely solid, very well managed company.

  4. Love me some NEE! I’ll stick with the common, though. Up over 18% in just the past year. That chart is a thing of beauty… It’s doubled in the past 5yrs alone. Strongest performer of the dozen ute’s I own. This new debt offering could easily be a flip candidate over its first 30 days or so.

    1. I too have some HASI, PEGI and MIC bot near a bottom after the Renewable Trump Dump and King Coal revival. Luckily, they are in IRA. Have been selling close in call options and rolling out, then back down for about 18 months. I can’t get rid of them…get them called. I like to collect the divs and capture the option premiums, but am determined to get out of all equities. I have old habits that I want to change now and not try to act like an Ego Super Trader since I can’t make enough correct trades in a row to get to Money Magazine status. It has been successful thus far for this sector for me, including TEVA bot at the thump to $9. I hope to roll DOWN into in the money calls and let them get called…after just ONE MORE divy!! (Don’t tell my counsellor I said that!) I am ready for some forget the hype investing. That’s what led me here last year. That common divy is my pref or bond coverage. JA

  5. Your comment made me do a quick revisit here: Make sure to read the tan box on QO regarding unverified potential call. I have it on my watch list at a par price along with others. In general, News Corp’s overall credit rating is Baa1 from what I find. News Corp is a blob of companies and did not go to prospectus to read anything to see what is funding this security.

  6. Sorry, not about NextEra but a strange IG issue:

    Synthetic Fixed-Income Sec STRATS 2006-04, 7.00% News Corp.
    Ticker Symbol: GJV CUSIP: 863117206 Exchange: NYSE

    Anyone have info or opinions on this? Sock drawer candidate? Or ill-liquid, foreign money trap?

    1. I have 300 shares in GJV. All I know about it is from QuantumonLine. It is a trust preferred, so dividend is really interest and is therefore treated as ordinary income, tax-wise. Share price has been relatively stable, mostly in the range $25-26 over the last year. Trading in this issue has been very thin, though. There was a rumor that it is to be called last December but it turned out to be false. So far I have been happy with it, collecting 7%.

      1. Thanks MFZ. My main concern is its ill-iquidity. I can live with the semi-annual payments.

        1. Mikeo, I’ve had GJV so long that sometimes I forget I own it. Remarkably stable price through thick and thin and 7%. As MFZ said there is a call scare in effect, also News Corp may not be as solid as it once was but it’s still good enough for me.

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