NextEra Energy Partners (NEP) Issues Notes To Repay Debt

NextEra Energy Partners, LP (NYSE:NEP) announced that it has made an offering of $1.1 billion in aggregate principal amount of senior unsecured notes in a series of tranches through its direct subsidiary, NextEra Energy Operating Partners, LP, (NEP OpCo) in a private placement. These notes are expected to be issued in a series of tranches with maturities up to 10 years.

NEP OpCo intends to use a portion of the net proceeds from this offering to pay off the outstanding balance under its revolving credit facility, other outstanding debts and related fees, expenses and costs. It intends to make use of the remaining amount toward general partnership purposes.

NextEra Energy Partners was formed as limited partnership by NextEra Energy, Inc. (NYSE:NEE) to acquire, manage and own contracted clean energy projects with stable, long-term cash flows.

The above private placement will aid the company to provide the financing flexibility needed to pay off its outstanding debts and create substantial balance sheet capacity moving forward. As such the issuance of senior unsecured notes in a private placement will aid it to save up on additional expenses and costs.

Other Steps toward Capital Strengthening

Additionally, the partnership has also been taking steps to strengthen balance sheet while using proceeds to fund growth projects and utilize the excess toward debt lowering purposes. Most recently it announced the completion of sale of $300-million convertible senior notes due 2020. The partnership aims to use a part of the proceeds for general partnership purposes. (Readmore: NextEra Energy Partners Issues Debt to Fund Asset Purchase)

Price Movement

Units of NextEra Energy Partners have returned 50.4%, outperforming the industry’s increase of 18.6% in the last one year.

This outperformance can be attributed to the company’s growing renewable portfolio which has provided a boost to performance.

Zacks Rank & Key Picks

NextEra Energy Partners carries a Zacks Rank #3 (Hold). Investors can consider a better-ranked stock from the broader sector such as JA Solar Holdings, Co., Ltd. (NASDAQ:JASO) and SolarEdge Technologies, Inc. (NASDAQ:SEDG) that sport a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SolarEdge delivered an average earnings surprise of 21.7% in the trailing four quarters. Its 2017 estimates have risen by 32.4% to $1.88 in the last 90 days.

JA Solar delivered an average surprise of 716.7% in the trailing four quarters. Its 2017 estimates have risen by 6000% to 61 cents per share in the last 90 days.

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