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NextEra Energy Partners (NEP) Prices $600M Notes for Refinancing
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NextEra Energy Partners (NEP - Free Report) announced an offering of $600 million in aggregate principal amount of its convertible senior notes due 2025. Holders of the notes will be eligible to covert all or a portion of their notes at any time prior to their maturity date in principal amounts equal to $1,000 or an integral multiple thereof.
The partnership intends to use the proceeds from the convertible notes to redeem a portion of NextEra Energy Operating Partners’ outstanding 4.25% senior notes due 2024. Proceeds not utilized may temporarily be invested in short-term instruments or used for general partnership purposes.
The above strategic move from the firm extends the maturity period of its existing debt by another year.
Effective Management of Debt
The firm’s debt to capital at third quarter-end was 36.7%, better than the Zacks S&P 500 composite’s average of 42.1%. It has been steadily lowering the proportion of debt in the capital mix. At 2015-end, the firm’s debt to capital was 64.6%, which declined to 37% at 2019-end due to repayment and effective management of debts.
Moreover, during the third quarter, the firm efficiently used low-cost financing to complete the conversion of nearly $300 million of convertible debt into NextEra Energy Partners common units. Due to efficient management of long-term debt, the firm’s interest expenses at the end of the first nine months of 2020 were $730 million compared with $735 million in the comparable year-ago period.
Long-Term Plans
The partnership aims to expand the existing operations through organic growth and selective acquisitions, which are in sync with the current renewable energy and natural gas pipeline projects in its portfolio. The firm has successfully completed its first two organic growth investments ahead of schedule and on budget.
The firm recently entered into an agreement with NextEra Energy Resources to acquire a 40% interest in a nearly 1-gigawatt renewables portfolio and 100% stake in a 100-megawatt solar-plus-storage project. This deal will further expand its renewable operation in the United States. Earlier, the firm acquired 600 MW of wind and solar assets from NextEra Energy’s (NEE - Free Report) unit, Energy Resources.
Covanta Holding and Ameresco delivered an earnings surprise of 75% and 68.6%, on average, in the last four quarters, respectively.
The Zacks Consensus Estimate for 2020 bottom line for Ameresco and Covanta Holding has moved up 10.9% and 17.9%, respectively, in the past 60 days.
Price Performance
In the past year, units of NextEra Energy Partners have gained 26.1% compared with the industry’s 2.5% growth.
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NextEra Energy Partners (NEP) Prices $600M Notes for Refinancing
NextEra Energy Partners (NEP - Free Report) announced an offering of $600 million in aggregate principal amount of its convertible senior notes due 2025. Holders of the notes will be eligible to covert all or a portion of their notes at any time prior to their maturity date in principal amounts equal to $1,000 or an integral multiple thereof.
The partnership intends to use the proceeds from the convertible notes to redeem a portion of NextEra Energy Operating Partners’ outstanding 4.25% senior notes due 2024. Proceeds not utilized may temporarily be invested in short-term instruments or used for general partnership purposes.
The above strategic move from the firm extends the maturity period of its existing debt by another year.
Effective Management of Debt
The firm’s debt to capital at third quarter-end was 36.7%, better than the Zacks S&P 500 composite’s average of 42.1%. It has been steadily lowering the proportion of debt in the capital mix. At 2015-end, the firm’s debt to capital was 64.6%, which declined to 37% at 2019-end due to repayment and effective management of debts.
Moreover, during the third quarter, the firm efficiently used low-cost financing to complete the conversion of nearly $300 million of convertible debt into NextEra Energy Partners common units. Due to efficient management of long-term debt, the firm’s interest expenses at the end of the first nine months of 2020 were $730 million compared with $735 million in the comparable year-ago period.
Long-Term Plans
The partnership aims to expand the existing operations through organic growth and selective acquisitions, which are in sync with the current renewable energy and natural gas pipeline projects in its portfolio. The firm has successfully completed its first two organic growth investments ahead of schedule and on budget.
The firm recently entered into an agreement with NextEra Energy Resources to acquire a 40% interest in a nearly 1-gigawatt renewables portfolio and 100% stake in a 100-megawatt solar-plus-storage project. This deal will further expand its renewable operation in the United States. Earlier, the firm acquired 600 MW of wind and solar assets from NextEra Energy’s (NEE - Free Report) unit, Energy Resources.
Zacks Rank & Key Picks
NextEra Energy Partners currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Covanta Holding Corporation and Ameresco Inc. (AMRC - Free Report) , each holding a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Covanta Holding and Ameresco delivered an earnings surprise of 75% and 68.6%, on average, in the last four quarters, respectively.
The Zacks Consensus Estimate for 2020 bottom line for Ameresco and Covanta Holding has moved up 10.9% and 17.9%, respectively, in the past 60 days.
Price Performance
In the past year, units of NextEra Energy Partners have gained 26.1% compared with the industry’s 2.5% growth.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>