NextEra Raises Funds for Wind Power

Redwood Trails Wind, LLC, a unit of  NextEra Energy, Inc. (NEE - Analyst Report), has arranged $234 million for the financing of its wind projects in Oklahoma and California. Another NextEra business wing, Golden Winds, LLC, raised $131 million for its three wind farms in California. Both Redwood Trails Wind and Golden Winds are subsidiaries of NextEra Energy Resources, LLC, North America's largest owner and operator of wind and solar electricity generating assets.

The limited recourse term loan of $234 million raised by Redwood Trails Wind for the projects with a generation capacity of 237 megawatts carries a variable interest rate and will mature in December 2029. The loan is mortgaged on the wind energy projects’ assets and the ownership interest in Redwood Trails Wind, LLC. The company expects to use the loan amount partly to pay back the capital contributions made by it for the development and building of the wind energy projects.

Golden Winds, LLC raised $131 million in a tax-equity financing for three wind farms in California that have an aggregate capacity of 205.9 megawatts. It issued Class B membership interests to a multinational bank and in exchange will receive approximately $131 million at closing, and a capital contribution of $78 million in early 2012.

NextEra Energy’s long-term debts at the end of the third quarter of 2011 were $20 billion versus $18 billion as of December 31, 2010. The debt-to-equity ratio was 47%, deteriorating from 44% at the end of 2010, mainly due to the issue of new debts.

NextEra Energy is a well-managed, high-quality, regulated electric utility that serves high-growth areas of Florida. Looking ahead, we expect the company’s earnings growth to likely come from its investments in Florida’s utility infrastructure, and growing wind and solar investments.

However, we remain concerned about the volatility in the company’s commodity-exposed generation portfolio and the recovery of Florida’s economy. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Juno Beach, Florida, based NextEra Energy Inc. is a public utility holding company engaged in the generation, transmission, distribution, and sale of electric energy. The company has both regulated and non-regulated energy-related products and services, with operations in 28 states and Canada. The company mainly competes with TECO Energy, Inc. (TE - Analyst Report) and Southern Company (SO - Analyst Report).

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