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NiSource (NI) to Sell Equity Units & Spend on Clean Energy
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NiSource Inc. (NI - Free Report) aims to sell 7.5 million equity units of $100 face value in the form of corporate unit and provide underwriters with the option to purchase 1.125 million additional corporate units. The net proceeds will be utilized to invest in renewable generation and serve general corporate purposes like amassing working capital and repaying the existing debt.
Leaving the issuances under its existing programmatic ATM program, the utility’s current offering will meet all the likely equity needs through 2024. This move will also remove the need for the block equity issuance, which was planned for 2022 or 2023.
Liquidity Position
The strategic action is in sync with the utility’s near and long-term financial plan. NiSource’s long-term debts as of Dec 31, 2020 were $9,219.8 million compared with $7,856.2 million as of Dec 31, 2019. The company currently has $1.7 billion liquidity available and $2.1 billion of committed facilities, which are adequate to meet its debt obligations. Its times interest earned ratio was 0.9 for the fourth quarter, up from 0.2 in the third quarter. Also, the company consistently preserved liquidity by pushing its maturity period forward.
Capital Plans & Focus on Renewables
Along with the offering, NiSource announced plans to spend $2 billion on renewable sources. Many solar and wind projects of the utility are coming up by 2023, which will add 2,145 megawatt (MW) of energy. Moreover, management is likely to announce additional renewable projects in the upcoming months. The utility is continuously working on an infrastructure modernization program for the long haul.
NiSource made capital investments worth $1.8 billion in 2020. Over the 2021-2024 time frame, the company is going to invest in the range of $9.5-$10.6 billion. Moreover, it is set to retire its 100% coal-generating sources by 2028 and replace the same with reliable, more affordable and cleaner options at lower costs. It aims to reduce 90% of its greenhouse gas emissions within 2030 from the 2005 baseline and save more than $4 billion for customers of more than 30 years. NiSource has plans to invest in the $1.8-$2 billion band, primarily in 2022 and 2023, to meet its renewable goals.
Transition in U.S. Electric Utility
With the whole world resorting to renewable energy, the U.S. utility industry is also shifting its focus to clean resources for electricity generation. Per the U.S. Energy Information Administration, renewable energy generation will account for 21% in 2021 and 22% in 2022, up from 20% in 2020. In 2020, wind energy was a source for 8.4% of the total electricity generation in the United States. Total annual use of wind to generate electricity in the United States increased from 6 billion kilowatthours (kWh) in 2000 to 338 billion kWh in 2020. Also, the same for solar energy rose from 5 million kWh in 1984 to 133 billion kWh in 2020.
Along with NiSource, other utilities like Xcel Energy (XEL - Free Report) , DTE Energy (DTE - Free Report) and Avista Corporation (AVA - Free Report) are also tapping the opportunity to transition to cleaner energy for adopting a business strategy that is environmentally sustainable. These companies chalked out a long-term plan to supply 100% clean energy to customers.
Shares of the company have gained 7.5% in the past month, outperforming the industry’s rise of 2.9%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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NiSource (NI) to Sell Equity Units & Spend on Clean Energy
NiSource Inc. (NI - Free Report) aims to sell 7.5 million equity units of $100 face value in the form of corporate unit and provide underwriters with the option to purchase 1.125 million additional corporate units. The net proceeds will be utilized to invest in renewable generation and serve general corporate purposes like amassing working capital and repaying the existing debt.
Leaving the issuances under its existing programmatic ATM program, the utility’s current offering will meet all the likely equity needs through 2024. This move will also remove the need for the block equity issuance, which was planned for 2022 or 2023.
Liquidity Position
The strategic action is in sync with the utility’s near and long-term financial plan. NiSource’s long-term debts as of Dec 31, 2020 were $9,219.8 million compared with $7,856.2 million as of Dec 31, 2019. The company currently has $1.7 billion liquidity available and $2.1 billion of committed facilities, which are adequate to meet its debt obligations. Its times interest earned ratio was 0.9 for the fourth quarter, up from 0.2 in the third quarter. Also, the company consistently preserved liquidity by pushing its maturity period forward.
Capital Plans & Focus on Renewables
Along with the offering, NiSource announced plans to spend $2 billion on renewable sources. Many solar and wind projects of the utility are coming up by 2023, which will add 2,145 megawatt (MW) of energy. Moreover, management is likely to announce additional renewable projects in the upcoming months. The utility is continuously working on an infrastructure modernization program for the long haul.
NiSource made capital investments worth $1.8 billion in 2020. Over the 2021-2024 time frame, the company is going to invest in the range of $9.5-$10.6 billion. Moreover, it is set to retire its 100% coal-generating sources by 2028 and replace the same with reliable, more affordable and cleaner options at lower costs. It aims to reduce 90% of its greenhouse gas emissions within 2030 from the 2005 baseline and save more than $4 billion for customers of more than 30 years. NiSource has plans to invest in the $1.8-$2 billion band, primarily in 2022 and 2023, to meet its renewable goals.
Transition in U.S. Electric Utility
With the whole world resorting to renewable energy, the U.S. utility industry is also shifting its focus to clean resources for electricity generation. Per the U.S. Energy Information Administration, renewable energy generation will account for 21% in 2021 and 22% in 2022, up from 20% in 2020. In 2020, wind energy was a source for 8.4% of the total electricity generation in the United States. Total annual use of wind to generate electricity in the United States increased from 6 billion kilowatthours (kWh) in 2000 to 338 billion kWh in 2020. Also, the same for solar energy rose from 5 million kWh in 1984 to 133 billion kWh in 2020.
Along with NiSource, other utilities like Xcel Energy (XEL - Free Report) , DTE Energy (DTE - Free Report) and Avista Corporation (AVA - Free Report) are also tapping the opportunity to transition to cleaner energy for adopting a business strategy that is environmentally sustainable. These companies chalked out a long-term plan to supply 100% clean energy to customers.
Zacks Rank & Price Performance
NiSource currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have gained 7.5% in the past month, outperforming the industry’s rise of 2.9%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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