NextEra Energy Capital Holdings Inc., a subsidiary of NextEra Energy Inc. (NEE) sold $400 million of 4.5% debentures due June 2021.
NextEra is offering the debentures at 99.922% of face value with an expected yield of 4.51% at maturity.
The sale proceeds will be utilized by NextEra Energy Capital Holdings to pay back some of its outstanding commercial paper obligations and use the rest for other corporate purposes.
NextEra Energy's long-term debts as of March 31, 2011, were $18.3 billion, inching up from 2010 level of $18 million. The debt-to-capital ratio at the end of the first quarter 2011 was 47%, deteriorating from 44% at the end of 2010, mainly due to the issue of new debts in the quarter under review.
Interest expenses in the first quarter 2011 swelled by 6.7% to $254 million owing to a higher debt level. With this new debenture issuance, the company will have to dish out an extra $18 million annually.
Recently, Florida Power & Light Company, another subsidiary of NextEra Energy announced to sell $250 million of first mortgage bonds yielding 5.125% interest per year and maturing on June 1, 2041. The offer price of the bonds is $99.91 and is supposed to yield 5.131%, at the end of the maturity period.
NextEra reported 2011 operating earnings of 94 cents per share, at par with the year-ago quarter. The results of the company fell below the Zacks Consensus Estimate.
In its earnings conference call, the company NextEra Energy upgraded its 2011 earnings guidance to a range of $4.35 to $4.65 per from the prior range of $4.25 to $4.55 per share. The company also expects earnings to grow at an average rate of 5% to 7% from 2011 through 2014.
The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are $1.07 per share, $4.47 per share and $4.74 per share, respectively.
We maintain our Neutral recommendation on NextEra Energy. The quantitative Zacks #3 Rank (short-term Neutral rating) for the company indicates no clear directional pressure on the stock over the near term.
Based in Juno Beach, Florida, NextEra Energy Inc., through its subsidiaries, engages in the generation, transmission, distribution and sale of electric energy in Florida. The company competes with Progress Energy Inc. (PGN) and Southern Company (SO).
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