UPDATE - NextEra sets 0% coupon on USD-500m senior notes issue

NextEra Energy Partners LP (NYSE:NEP) on Tuesday set a zero coupon on its USD-500-million (EUR 412.2m) senior notes offering aimed at partly financing the acquisition of a 391-MW wind portfolio from Brookfield Renewable.

The convertible senior notes due on June 15, 2024, will be sold in a private placement to institutional buyers closing June 17. They will not bear regular interest and their principal amount will not accrete.

NextEra Energy Operating Partners LP, a direct subsidiary of NextEra Energy Partners, will guarantee the issuance on a senior unsecured basis.

The notes will be convertible in principle amounts worth USD 1,000 for a cash amount, NextEra Energy Partners common units, or a combination of both. The initial conversion rate will be equal to a 20% premium to the USD-75.42 closing price of NextEra’s common units on June 14, 2020.

As agreed in April, NextEra is set to purchase three wind farms in California and one in New Hampshire in a deal worth USD 733 million. The portfolio's capacity is almost fully contracted with investment-grade counterparties.

In addition to the 391-MW acquisition, Nextera will earmark some of the raised funds to pay the initial cost of capped call transactions that are seen to bring a payment to NextEra or reduce the potential dilution to its common units. A portion of the net proceeds, estimated at USD 498.6 million, may temporarily be invested in short-term instruments or used for general partnership purposes.

(USD 1.0 = EUR 0.824)

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