New NextEra edges up dollar-neutral; older NextEra slips; primary yields about $2 billion

By Rebecca Melvin

New York, Sept. 11 – NextEra Energy Inc.’s newly priced mandatory convertibles were flat to lower on an outright basis but edged up on a dollar-neutral basis early Friday after the Juno Beach, Fla.-based utility priced the overnight $700 million of units at the pricing that was talked.

The NextEra 6.371% equity units were seen at 49.75 bid, 50 offered at mid-afternoon with the shares slightly lower at about $95.00, one source said.

The issue was “performing like they are supposed to be – trading above the issue price,” a second source said.

NextEra’s older 5.799% mandatory convertible due 2016, of which $500 million priced in September 2013, traded down to 50 bid, 50.5 offered, which was down from about 53 previously, a source said.

The new NextEra deal capped a busy week in the convertible primary market in which about $2 billion in four deals priced. The deals were moderately attractive in terms of pricing and traded modestly, or flat to in line with their underlying shares.

The moderate performance in terms of trading in the aftermarket wasn’t an indicator of demand, however, a New York-based trader said. It was more a function of sector, structure and size.

“There is still plenty of appetite for new paper, the trader said. “Bids hit yesterday haven’t affected the market at all; there is further demand out there for more paper.”

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