NextEra Energy, Inc. · NYSE:NEE
NextEra Energy — Debt Investor Presentation (May 2012)
24 slides from NextEra Energy's debt investor presentation, May 7, 2012
Slide 1: Fixed Income Investor Meeting: Hybrid Securities, Spain and Lone Star Financings
Fixed Income Investor Meeting Hybrid Securities, Spain and Lone Star Financings Aldo Portales Assistant Treasurer May 7, 2012
Slide 2: Agenda
Agenda • Review of Hybrid Securities • Spain Project Financing • Lone Star Transmission Financing 2
Slide 3: Hybrids are a popular financing tool across multiple industries
Hybrids are a popular financing tool across multiple industries, with over $90 billion issued in the past 5 years Global Hybrid Issuances ($MM)(1) Financial Savings Power & Annual Year Banks Insurance Services & Loan Pipelines Total 2007 $12,998 $5,975 $15,705 $700 $3,830 $39,228 2008 13,154 5,770 1
Slide 4: Many in the North American power industry have been active issuers of hybrids
Many in the North American power industry have been active issuers of hybrids Recent Power Company Hybrid Issuances (1) Company Name Issue Date Maturity Date Amount ($MM) Puget Energy Inc 2007 2067 $250 Enterprise Products Partners LP 2007 2068 700 Wisconsin Energy Corp 2007 2067 500 Exelon Corp 200
Slide 5: Ratings agencies have commented on credit supportive characteristics of hybrids (S&P)
Ratings agencies have commented on the credit supportive characteristics of hybrids as a financing vehicle Rating Agency Comments on Hybrids • Standard and Poor’s: “Hybrid capital instruments have been developed with the goal of gaining recognition as being equity like-–that is, being granted "equit
Slide 6: Ratings agencies comments on hybrids (Moody's)
Ratings agencies have commented on the credit supportive characteristics of hybrids as a financing vehicle Rating Agency Comments on Hybrids (continued) • Moody’s: “The popularity of hybrid securities as a viable funding alternative to common equity continues to grow across all industries. Hybrids h
Slide 7: Ratings agencies comments on hybrids (Fitch)
Ratings agencies have commented on the credit supportive characteristics of hybrids as a financing vehicle Rating Agency Comments on Hybrids (continued) • Fitch Ratings: “Corporates and REITs issue hybrid securities in order to access cost-effective financing that provides the added benefit of minim
Slide 8: NextEra issues hybrid securities at the Capital Holdings level to fund its growth
NextEra issues hybrid securities at the Capital Holdings level to fund its growth NextEra Energy, Inc. “NextEra” Corporate Guarantee of Debt NextEra Energy Florida Power & Capital Holdings, Light Company “FPL” Inc. “Capital Holdings” Hybrid Rating BBB/Baa2/BBB (1) Total Debt $2.4 billion (2) Other S
Slide 9: Characteristics of NextEra's Hybrids
Our hybrids are a market accepted security that we use to fund investments in a credit-sensitive manner Characteristics of NextEra’s Hybrids • 60-year maturity with 5-year par call for retail transactions and 10 year par call for institutional transactions – Call dates provide considerable flexibili
Slide 10: NextEra has sought to build a modest segment of the capital structure in hybrids
NextEra has sought to build a modest segment of the capital structure in hybrids Capital Holdings Junior Subordinated Debentures(1) Issue Maturity Issue Market Coupon (%) Date Date Amount ($MM) Series A Retail 6.60 2006 2066 $350 Series B Institutional 6.35 2006 2066 339 Series C Institutional 6.65
Slide 11: Agenda
Agenda • Review of Hybrid Securities • Spain Project Financing • Lone Star Transmission Financing 11
Slide 12: Spain Solar Strategic Rationale
Energy Resources’ solar thermal project in Spain capitalizes on a core strength of the company in an attractive market for renewables Spain Solar Strategic Rationale • Spain is one of the biggest and most attractive markets for renewables in the world – Supported by feed-in tariff structure • Opport
Slide 13: Spain Project Overview: Extremadura solar thermal project
Our solar thermal project is located in Extremadura, Spain one of Europe’s sunniest areas Spain Project Overview • 99.8 MW solar thermal project, consisting of two separate 49.9 MW units • Parabolic trough technology augmented by gas and thermal energy storage • Located in Extremadura, Spain • Locat
Slide 14: Construction is on schedule for our Spain solar project
Construction is on schedule for our Spain solar project Spain Solar Project Update • Transmission facilities complete and in service • 2012 focus is on meeting all construction milestones • Construction is over 80% and 50% complete on Unit 1 and Unit 2, respectively Unit 1 • Expected Commercial Oper
Slide 15: We have obtained construction and term financing while mitigating tariff risk
We have obtained construction and term financing while mitigating tariff risk Key Objectives of the Financing • Provide Liquidity – Construction financing provides an efficient source of funds for the Project – Upon construction completion in 2014, automatic conversion to a term loan ending December
Slide 16: The €589 MM construction and term loan
The €589 MM construction and term loan is used to finance a portion of the costs to build the project Construction and Term Loan • Euro denominated, limited-recourse variable rate loan facility used to fund the cost associated with constructing the Spain Solar Project • Facility size – €589 MM (~$87
Slide 17: The €40 MM VAT Loan
The €40 MM VAT Loan is used to finance the value added taxes incurred during the construction of the project VAT Loan Facility • Euro denominated, revolving loan facility that is used to finance ongoing value added tax (VAT) payments associated with the construction of the Spain Solar Project • Work
Slide 18: The Euro revolving loan
The Euro revolving loan is used to fund the project level equity contributions and provide a hedge against movement in foreign exchange rates Euro Revolving Loan • Euro denominated loan facility that is used to finance project level equity contribution requirement for the Spain solar project • Borro
Slide 19: Spain Solar Capital Costs and Capital Structure
NextEra has funded the majority of its investment in the Spain Solar project through Euro denominated sources of fund Spain Solar Capital Costs and Capital Structure (1) €900 € 843 MM €800 Equity - €84 MM €700 Euro Revolving Loan - €170 MM €600 €500 €400 Project Debt - €300 €589 MM €200 €100 €0 Proj
Slide 20: Agenda
Agenda • Review of Hybrid Securities • Spain Project Financing • Lone Star Transmission Financing 20
Slide 21: Lone Star Transmission: cornerstone of our growing transmission business
With a large Competitive Renewable Energy Zone (CREZ) project under construction in Texas, Lone Star is the cornerstone of our growing transmission business Lone Star Transmission • ~320 mile, 345 kV CREZ transmission line and five substations in Texas • Land acquisition is >90% complete and constru
Slide 22: Lone Star financing overview
As a regulated asset, Lone Star provides for an attractive investment opportunity that fits into our overall strategy Financing Overview • $387 million construction facility – Closed on November 11; final maturity November 2016 – Provided by a syndicate of banks – Repayment based solely upon future
Slide 23: Significant financing activity regarding other assets in the CREZ build
There has also been significant financing activity regarding other assets in the CREZ build CREZ Summary • Three other projects in the CREZ system obtained financing around the same time as Lone Star • Over $1.3 billion has been raised related to these projects – Projects include over 800 miles of t
Slide 24: NextEra Energy
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