JUNO BEACH, Fla., Sept. 11, 2017 /PRNewswire/ -- NextEra
Energy Partners, LP (NYSE: NEP) announced that it has completed the placement and has closed the sale of $300 million in aggregate principal amount of its 1.50 percent convertible senior notes due 2020 (the "notes")
in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act").
"This offering further demonstrates NextEra Energy Partners' ability to tap into new sources of capital and is expected to
enable the partnership to complete our growth funding for the year," said Jim Robo, chairman and
chief executive officer of NextEra Energy Partners. "The notes have the potential to convert into equity at a 25 percent premium
to the Sept. 6, 2017, closing price, and the inclusion of a call spread is designed to allow
NextEra Energy Partners to receive additional consideration in the future should the unit price increase between 25 and 50
percent. NextEra Energy Partners offers what we believe to be a superior investor value proposition, with clear visibility to
grow limited partner unit distributions by 12 to 15 percent through at least 2022, supported by diversified cash flows from
long-term contracts with strong creditworthy counterparties. The partnership continues to demonstrate significant flexibility in
financing our growth as evidenced by this convertible debt offering, the convertible preferred offering announced in June and our
mid- to high-BB credit rating. As a result of this flexibility, aside from any modest issuances under the at-the-market program,
we expect that NextEra Energy Partners will not need to sell common equity until 2020 at the earliest."
The notes pay interest semi-annually at an annual rate of 1.50 percent. Holders may convert all or a portion of their notes at
any time prior to their maturity date in principal amounts equal to $1,000 or an integral multiple
thereof into NextEra Energy Partners common units and cash in lieu of any fractional common unit, subject to customary
conditions. The initial conversion rate represents an approximately 25 percent premium to the $42.29 per common unit closing price of NextEra Energy Partners common units on the New York Stock Exchange on
Sept. 6, 2017. The conversion rate is subject to adjustment in certain circumstances and has been
structured to allow an approximate 15 percent annualized growth rate in distributions per unit from the current distribution rate
through the maturity of the notes without an adjustment to the conversion rate. The notes will mature on Sept. 15, 2020, and are fully and unconditionally guaranteed on a senior basis by NextEra Energy Operating
Partners, LP, a direct subsidiary of NextEra Energy Partners.
In connection with the offering of the notes, NextEra Energy Partners entered into a capped call transaction with an affiliate
of the initial purchaser (the counterparty) with a lower strike price of $52.8625 and a cap price
of $63.4350, in each case per unit of NextEra Energy Partners common units. If, upon conversion of
the notes, the price per unit of NextEra Energy Partners common units during the relevant valuation period is above the lower
strike price of $52.8625, the capped call transactions is expected to generally result in a payment
to NextEra Energy Partners (if the partnership elects to cash settle) or to reduce the potential dilution to NextEra Energy
Partners common units (if the partnership elects to settle in NextEra Energy Partners common units).
NextEra Energy Partners estimates the net proceeds from the notes offering and the capped call transaction, in each case,
prior to offering expenses are approximately $281.7 million. NextEra Energy Partners intends to use
a portion of the net proceeds from this offering to fund the potential future acquisition of renewable energy assets either from
NextEra Energy Resources, LLC, or from other third parties, as well as to fund the initial cost of the capped call transaction.
Any remaining proceeds are expected to be used for general partnership purposes.
NextEra Energy Partners has received an offer from NextEra Energy Resources to sell the following assets to the
partnership:
- 25.9 percent interest in Desert Sunlight 250 and Desert Sunlight 300, which are solar energy generating facilities in
Riverside County, California, with generating capacities of approximately 250 megawatts (MW)
and 300 MW, respectively;
- Brady Wind I and Brady Wind II, which are wind energy centers
in Stark and Hettinger counties, North Dakota, with generating capacities of approximately 149.7 MW and 149 MW, respectively; and
- Javelina I, which is an approximately 249.7-MW wind energy center in Webb County,
Texas.
NextEra Energy Partners is under no obligation to accept the offer. Any purchase by NextEra Energy Partners of the
offered assets is subject to the negotiation of the terms of the purchase, including the purchase price, and approval by its
conflicts committee. To the extent NextEra Energy Partners purchases such assets, net proceeds from the offering of the notes may
be used to fund the purchase of such assets.
Barclays Capital Inc. acted as sole bookrunner for the offering.
The offer and sale of notes, the guarantee and NextEra Energy Partners common units, if any, issuable upon conversion of the
notes have not been registered under the Securities Act or the securities laws of any other jurisdiction. Accordingly, the notes
were offered and sold only to qualified institutional buyers in reliance on Rule 144A under the Securities Act. The notes, the
guarantee and NextEra Energy Partners common units issuable upon conversion of the notes are not transferable absent registration
or an applicable exemption from the registration requirements of the Securities Act. This news release does not constitute an
offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these
securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities law of any such jurisdiction.
NextEra Energy Partners, LP
NextEra Energy Partners, LP (NYSE: NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NYSE: NEE) to
acquire, manage and own contracted clean energy projects with stable, long-term cash flows. Headquartered in Juno Beach, Florida, NextEra Energy Partners owns interests in wind and solar projects in North America, as well as natural gas infrastructure assets in Texas. The
renewable energy projects are fully contracted, use industry-leading technology and are located in regions that are favorable for
generating energy from the wind and sun. The seven natural gas pipelines in the portfolio are all strategically located, serving
power producers and municipalities in South Texas, processing plants and producers in the Eagle
Ford Shale, and commercial and industrial customers in the Houston area. The NET Mexico
Pipeline, the largest pipeline in the portfolio, provides a critical source of natural gas transportation for low-cost,
U.S.-sourced shale gas to Mexico.
Cautionary Statements and Risk Factors That May Affect Future Results
This news release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking
statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy Partners, LP
(together with its subsidiaries, NEP) regarding future operating results and other future events, many of which, by their nature,
are inherently uncertain and outside of NEP's control. Forward-looking statements in this news release include, among others,
statements concerning cash available for distributions expectations and future operating performance. In some cases, you can
identify the forward-looking statements by words or phrases such as "will," "may result," "expect," "anticipate," "believe,"
"intend," "plan," "seek," "aim," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should,"
"would" or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a
guarantee of future performance. The future results of NEP and its business and financial condition are subject to risks and
uncertainties that could cause NEP's actual results to differ materially from those expressed or implied in the forward-looking
statements, or may require it to limit or eliminate certain operations. These risks and uncertainties include, but are not
limited to, the following: NEP has a limited operating history and its projects include renewable energy projects that have a
limited operating history. Such projects may not perform as expected; NEP's ability to make cash distributions to its unitholders
is affected by wind and solar conditions at its renewable energy projects; NEP's business, financial condition, results of
operations and prospects can be materially adversely affected by weather conditions, including, but not limited to, the impact of
severe weather; Operation and maintenance of renewable energy projects involve significant risks that could result in unplanned
power outages, reduced output, personal injury or loss of life; Natural gas gathering and transmission activities involve
numerous risks that may result in accidents or otherwise affect the Texas pipelines' operations;
NEP depends on the Texas pipelines and certain of the renewable energy projects in its portfolio
for a substantial portion of its anticipated cash flows; NEP is pursuing the expansion of natural gas pipelines in its portfolio
that will require up-front capital expenditures and expose NEP to project development risks; NEP's ability to maximize the
productivity of the Texas pipeline business and to complete potential pipeline expansion
projects is dependent on the continued availability of natural gas production in the Texas
pipelines' areas of operation; Terrorist or similar attacks could impact NEP's projects, pipelines or surrounding areas and
adversely affect its business; The ability of NEP to obtain insurance and the terms of any available insurance coverage could be
materially adversely affected by international, national, state or local events and company-specific events, as well as the
financial condition of insurers. NEP's insurance coverage does not insure against all potential risks and it may become subject
to higher insurance premiums; Warranties provided by the suppliers of equipment for NEP's projects may be limited by the ability
of a supplier to satisfy its warranty obligations, or by the terms of the warranty, so the warranties may be insufficient to
compensate NEP for its losses; Supplier concentration at certain of NEP's projects may expose it to significant credit or
performance risks; NEP relies on interconnection and transmission facilities of third parties to deliver energy from its
renewable energy projects and, if these facilities become unavailable, NEP's wind and solar projects may not be able to operate
or deliver energy; If third-party pipelines and other facilities interconnected to the Texas
pipelines become partially or fully unavailable to transport natural gas, NEP's revenues and cash available for distribution to
unitholders could be adversely affected; NEP's business is subject to liabilities and operating restrictions arising from
environmental, health and safety laws and regulations, compliance with which may require significant capital expenditures,
increase NEP's cost of operations and affect or limit its business plans; NEP's renewable energy projects may be adversely
affected by legislative changes or a failure to comply with applicable energy regulations; A change in the jurisdictional
characterization of some of the Texas pipeline entities' assets, or a change in law or
regulatory policy, could result in increased regulation of these assets, which could have a material adverse effect on NEP's
business, financial condition, results of operations and ability to make cash distributions to its unitholders; NEP may incur
significant costs and liabilities as a result of pipeline integrity management program testing and any necessary pipeline repair
or preventative or remedial measures; The Texas pipelines' operations could incur significant
costs if the Pipeline and Hazardous Materials Safety Administration or the Railroad Commission of Texas adopts more stringent regulations; Petroleos Mexicanos (Pemex) may claim certain immunities under the
Foreign Sovereign Immunities Act and Mexican law, and the Texas pipeline entities' ability to
sue or recover from Pemex for breach of contract may be limited and may be exacerbated if there is a deterioration in the
economic relationship between the U.S. and Mexico; NEP does not own all of the land on which the
projects in its portfolio are located and its use and enjoyment of the property may be adversely affected to the extent that
there are any lienholders or leaseholders that have rights that are superior to NEP's rights or the U.S. Bureau of Land
Management suspends its federal rights-of-way grants; NEP is subject to risks associated with litigation or administrative
proceedings that could materially impact its operations, including, but not limited to, proceedings related to projects it
acquires in the future; NEP's wind projects located in Canada are subject to Canadian domestic
content requirements under their Feed-in-Tariff contracts; NEP's cross-border operations require NEP to comply with
anti-corruption laws and regulations of the U.S. government and non-U.S. jurisdictions; NEP is subject to risks associated with
its ownership or acquisition of projects or pipelines that remain under construction, which could result in its inability to
complete construction projects on time or at all, and make projects too expensive to complete or cause the return on an
investment to be less than expected; NEP relies on a limited number of customers and is exposed to the risk that they are
unwilling or unable to fulfill their contractual obligations to NEP or that they otherwise terminate their agreements with NEP;
NEP may not be able to extend, renew or replace expiring or terminated power purchase agreements (PPA) at favorable rates or on a
long-term basis; NEP may be unable to secure renewals of long-term natural gas transportation agreements, which could expose its
revenues to increased volatility; If the energy production by or availability of NEP's U.S. renewable energy projects is less
than expected, they may not be able to satisfy minimum production or availability obligations under the U.S. Project Entities'
PPAs; NEP's growth strategy depends on locating and acquiring interests in additional projects consistent with its business
strategy at favorable prices; NextEra Energy Operating Partners' (NEP OpCo) partnership agreement requires that it distribute its
available cash, which could limit NEP's ability to grow and make acquisitions; Lower prices for other fuel sources may reduce the
demand for wind and solar energy; Reductions in demand for natural gas in the United States or
Mexico and low market prices of natural gas could materially adversely affect the Texas pipelines' operations and cash flows; Government laws, regulations and policies providing incentives
and subsidies for clean energy could be changed, reduced or eliminated at any time and such changes may negatively impact NEP's
growth strategy; NEP's growth strategy depends on the acquisition of projects developed by NextEra Energy, Inc. (NEE) and third
parties, which face risks related to project siting, financing, construction, permitting, the environment, governmental approvals
and the negotiation of project development agreements; Acquisitions of existing clean energy projects involve numerous risks;
Renewable energy procurement is subject to U.S. state and Canadian provincial regulations, with relatively irregular, infrequent
and often competitive procurement windows; NEP may continue to acquire other sources of clean energy and may expand to include
other types of assets. Any further acquisition of non-renewable energy projects may present unforeseen challenges and result in a
competitive disadvantage relative to NEP's more-established competitors; NEP faces substantial competition primarily from
regulated utilities, developers, independent power producers, pension funds and private equity funds for opportunities in
North America; The natural gas pipeline industry is highly competitive, and increased
competitive pressure could adversely affect NEP's business; NEP may not be able to access sources of capital on commercially
reasonable terms, which would have a material adverse effect on its ability to consummate future acquisitions; Restrictions in
NEP OpCo's subsidiaries' revolving credit facility and term loan agreements could adversely affect NEP's business, financial
condition, results of operations and ability to make cash distributions to its unitholders; NEP's cash distributions to its
unitholders may be reduced as a result of restrictions on NEP's subsidiaries' cash distributions to NEP under the terms of their
indebtedness; NEP's subsidiaries' substantial amount of indebtedness may adversely affect NEP's ability to operate its business,
and its failure to comply with the terms of its subsidiaries' indebtedness could have a material adverse effect on NEP's
financial condition; Currency exchange rate fluctuations may affect NEP's operations; NEP is exposed to risks inherent in its use
of interest rate swaps; NEE exercises significant influence over NEP; NEP receives credit support from NEE and its affiliates.
NEP's subsidiaries may default under contracts or become subject to cash sweeps if credit support is terminated, if NEE or its
affiliates fail to honor their obligations under credit support arrangements, or if NEE or another credit support provider ceases
to satisfy creditworthiness requirements, and NEP will be required in certain circumstances to reimburse NEE for draws that are
made on credit support; NextEra Energy Resources, LLC (NEER) or one of its affiliates is permitted to borrow funds received by
NEP's subsidiaries and is obligated to return these funds only as needed to cover project costs and distributions or as demanded
by NEP OpCo. NEP's financial condition and ability to make distributions to its unitholders, as well as its ability to grow
distributions in the future, is highly dependent on NEER's performance of its obligations to return all or a portion of these
funds; NEP may not be able to consummate future acquisitions; NEER's right of first refusal may adversely affect NEP's ability to
consummate future sales or to obtain favorable sale terms; NextEra Energy Partners GP, Inc. (NEP GP) and its affiliates may have
conflicts of interest with NEP and have limited duties to NEP and its unitholders; NEP GP and its affiliates and the directors
and officers of NEP are not restricted in their ability to compete with NEP, whose business is subject to certain restrictions;
NEP may only terminate the Management Services Agreement among, NEP, NextEra Energy Management Partners, LP (NEE Management), NEP
OpCo and NextEra Energy Operating Partners GP, LLC (NEP OpCo GP) under certain specified conditions; If the agreements with NEE
Management or NEER are terminated, NEP may be unable to contract with a substitute service provider on similar terms; NEP's
arrangements with NEE limit NEE's potential liability, and NEP has agreed to indemnify NEE against claims that it may face in
connection with such arrangements, which may lead NEE to assume greater risks when making decisions relating to NEP than it
otherwise would if acting solely for its own account; NEP's ability to make distributions to its unitholders depends on the
ability of NEP OpCo to make cash distributions to its limited partners; If NEP incurs material tax liabilities, NEP's
distributions to its unitholders may be reduced, without any corresponding reduction in the amount of the IDR fee; Holders of
NEP's common units may be subject to voting restrictions; NEP's partnership agreement replaces the fiduciary duties that NEP GP
and NEP's directors and officers might have to holders of its common units with contractual standards governing their duties;
NEP's partnership agreement restricts the remedies available to holders of NEP's common units for actions taken by NEP's
directors or NEP GP that might otherwise constitute breaches of fiduciary duties; Certain of NEP's actions require the consent of
NEP GP; Holders of NEP's common units currently cannot remove NEP GP without NEE's consent; NEE's interest in NEP GP and the
control of NEP GP may be transferred to a third party without unitholder consent; The IDR fee may be assigned to a third party
without unitholder consent; NEP may issue additional units without unitholder approval, which would dilute unitholder interests;
Reimbursements and fees owed to NEP GP and its affiliates for services provided to NEP or on NEP's behalf will reduce cash
distributions to or from NEP OpCo and from NEP to NEP's unitholders, and the amount and timing of such reimbursements and fees
will be determined by NEP GP and there are no limits on the amount that NEP OpCo may be required to pay; Discretion in
establishing cash reserves by NEP OpCo GP may reduce the amount of cash distributions to unitholders; NEP OpCo can borrow money
to pay distributions, which would reduce the amount of credit available to operate NEP's business; Increases in interest rates
could adversely impact the price of NEP's common units, NEP's ability to issue equity or incur debt for acquisitions or other
purposes and NEP's ability to make cash distributions to its unitholders; The price of NEP's common units may fluctuate
significantly and unitholders could lose all or part of their investment; The liability of holders of NEP's common units, which
represent limited partnership interests in NEP, may not be limited if a court finds that unitholder action constitutes control of
NEP's business; Unitholders may have liability to repay distributions that were wrongfully distributed to them; Provisions in
NEP's partnership agreement may discourage or delay an acquisition of NEP that NEP unitholders may consider favorable, which
could decrease the value of NEP's common units, and could make it more difficult for NEP unitholders to change NEP's board of
directors; NEP's board of directors, a majority of which may be affiliated with NEE, decides whether to retain separate counsel,
accountants or others to perform services for NEP; The New York Stock Exchange does not require a publicly traded limited
partnership like NEP to comply with certain of its corporate governance requirements; Issuance of the Series A convertible
preferred units will dilute common unitholders' ownership in NEP and may decrease the amount of cash available for distribution
for each common unit; The Series A convertible preferred units will have rights, preferences and privileges that are not held by,
and will be preferential to the rights of, holders of the common units; NEP's future tax liability may be greater than expected
if NEP does not generate net operating losses (NOLs) sufficient to offset taxable income or if tax authorities challenge certain
of NEP's tax positions; NEP's ability to use NOLs to offset future income may be limited; NEP will not have complete control over
NEP's tax decisions; A valuation allowance may be required for NEP's deferred tax assets; Distributions to unitholders may be
taxable as dividends; Unitholders who are not resident in Canada may be subject to Canadian tax
on gains from the sale of common units if NEP's common units derive more than 50% of their value from Canadian real property at
any time. NEP discusses these and other risks and uncertainties in its current report on Form 8-K filed on August 7, 2017 and other SEC filings, and this news release should be read in conjunction with such SEC filings
made through the date of this news release. The forward-looking statements made in this news release are made only as of the date
of this news release and NEP undertakes no obligation to update any forward-looking statements.
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SOURCE NextEra Energy Partners, LP