Research Update: NextEra Energy Inc.'s Equity Units Rated 'BBB'

We are assigning our 'BBB' issue-level rating to NextEra Energy Inc.'s (NEE) $2.5 billion equity units, which include a purchase contract issued by NEE and a series K debenture issued by NextEra Energy Capital Holdings Inc. due March 1, 2025. We rate the hybrid issuance two notches below our issuer credit rating on NEE, reflecting the equity unit's subordination and deferability. We assess the hybrid securities as having high (100%) equity content. The stable outlook on NEE reflects our view that the company will remain focused on growing its regulated utility business and will continue to reduce risk at its competitive businesses by strategically growing through contracted assets and that its regulated utility business will consistently reflect about 70% of

...- We are assigning our '###' issue-level rating to NextEra Energy Inc.'s (NEE) $2.5 billion equity units, which include a purchase contract issued by NEE and a series K debenture issued by NextEra Energy Capital Holdings Inc. due March 1, 2025. - We rate the hybrid issuance two notches below our issuer credit rating on NEE, reflecting the equity unit's subordination and deferability. - We assess the hybrid securities as having high (100%) equity content. - The stable outlook on NEE reflects our view that the company will remain focused on growing its regulated utility business and will continue to reduce risk at its competitive businesses by strategically growing through contracted assets and that its regulated utility business will consistently reflect about 70% of consolidated EBITDA. We generally expect that consolidated financial measures will continue to gradually weaken, resulting in funds from operations (FFO) to debt of 21%-24%....

Research Update