Why it fell more than 3% today

  • NextEra Energy (NEE) stock price fell more than 3% during the day today. That is why.

NextEra Energy (NEE) stock price fell more than 3% during the day today.

Why: NextEra Energy announced that it has agreed to sell $2.0 billion in shares to Citigroup, Goldman Sachs & Co. LLC and Mizuho. The deal is expected to close on September 19, 2022.

Capital shares: Each capital unit will be issued for a fixed amount of $50. Each capital unit will consist of an agreement to purchase common shares of NextEra Energy in the future and an undivided 5% interest in a debenture of NextEra Energy Capital Holdings, Inc. due September 1, 2027, to be issued in principal amount of $1,000. The debentures will be guaranteed by NextEra Energy Capital Holdings’ parent company, NextEra Energy, Inc. Aggregate annual distributions on the shares will be at the rate of 6.926%, consisting of interest on the debentures and payments under the purchase agreements of shares.

Share Purchase Agreements: Each share purchase agreement will obligate the holder to purchase shares of NextEra Energy common stock in cash, based on a price range per share of $88.88 to $111.10. The upper end of this price range reflects a 25% premium to the closing price of NextEra Energy’s common stock on the New York Stock Exchange on September 14, 2022, which was $88.88. And holders must complete the purchase of shares no later than September 1, 2025, and their purchase obligations can be satisfied with the proceeds of the remarketing of the debentures that make up a portion of their capital shares.

Net proceeds: The net proceeds from the sale of the Capital Units, which are expected to be approximately $1.94 billion (after deducting the subscription discount and other offering costs), will be added to the general funds of NextEra Energy Capital Holdings. NextEra Energy Capital Holdings plans to use its general funds to finance investments in energy and power projects and for other general corporate purposes, including the repayment of its outstanding commercial paper obligations.

Sallie R. Loera