NextEra units may borrow up to $5 billion under five-year agreement

By Susanna Moon

Chicago, Feb. 9 - NextEra Energy Capital Holdings, Inc. and Florida Power & Light Co. may borrow up to $5 billion for five years under new revolving line-of-credit and letter-of-credit agreements, according to an 8-K filing with the Securities and Exchange Commission.

The wholly owned subsidiaries of NextEra Energy, Inc. entered into the credit agreements on Thursday. They expire in February 2017.

The total amount of $5 billion consists of $3.1 billion of loans for Capital Holdings and $1.9 billion for Florida Power and also includes revolving letter-of-credit facilities for up to half of the amounts.

The new agreements replace about three-quarters of the credit made available under two existing revolving line-of-credit and letter-of-credit agreements, which was about $6.4 billion ($3.9 billion for Capital Holdings and $2.5 billion for Florida Power) before the new agreements, the filing noted.

The existing revolving line-of-credit and letter-of-credit facilities now provide for borrowings of up to about $1.6 billion ($979 million for Capital Holdings and $618 million for Florida Power) and include revolving letter-of-credit facilities for up to 100% of the amounts.

Proceeds will be used for general corporate purposes, including as backup liquidity for Capital Holding's and Florida Power's commercial paper programs and other short-term borrowings and to provide additional liquidity in case of a loss to the companies' or their subsidiaries' operating facilities.

Under the new terms, NextEra Energy and Florida Power are required to maintain a ratio of funded debt to total capitalization.

Tapping capital markets

As previously reported, NextEra Energy said it would need to access the capital markets periodically in the near future because the company continues to invest at a rate in excess of its ongoing operating cash flow.

"We also need to maintain a balance between incremental debt and equity and expect there will be a need to issue modest amount of equity in order to support our growth plans for 2012 thru 2014," chief financial officer Moray P. Dewhurst said during the company's fourth-quarter and full-year 2011 earnings conference call on Jan. 27.

NextEra is a Juno Beach, Fla.-based clean energy company.

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