QUANTUMONLINE.COM SECURITY DESCRIPTION: NextEra Energy, Inc. 6.926% Equity Units stated amount $50 per unit, initially consisting of Equity Units which include a stock purchase contract and a 5% undivided beneficial ownership interest in a NextEra Energy Capital Holdings, Inc Series M Debenture due September 1, 2027, issued in the principal amount of $1,000 by NextEra Energy Capital Holdings, Inc. The stock purchase contract requires the holder to purchase for $50 a variable number of shares of NextEra Energy, Inc. (NYSE: NEE) common stock no later than 9/1/2025 and pays a contract adjustment rate of 2.326% per annum. The stock purchase settlement rate will be 0.4500 shares per unit if the then current market price is equal to or greater than $111.10 and 0.5626 shares per unit if the market price is equal to or less than $88.88. For market prices between those values the settlement rate will be $50 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 9/14/2022 was $88.88 per share. The stock purchase contract may be settled any time at the holder’s option and the company will deliver 0.4500 shares of common stock for each purchase contract.
The Equity Units pay quarterly distributions of 6.926% ($3.463 per annum or $0.86575 per quarter) will be paid quarterly on 3/1, 6/1, 9/1 & 12/1 to holders of record on the record date which is one business day prior to the payment date while the securities remain in book-entry form (NOTE: the ex-dividend date is one business day prior to the record date). Distributions paid by these securities are derived from interest paid on the underlying debt securities and therefore are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders.
The Series M Debenture will initially bear interest at a rate of 4.60% per year and is due 9/1/2027. The Series M Debentures are subject to reset and remarketing on the fifth business day preceding 01/01/2025 and ending on 08/19/2025.
The holder has the right at any time to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury security for the Notes and to later recreate Corporate Units. This security was rated as Baa2 by Moody’s and BBB by S&P at the date of its IPO. The Equity Units are unsecured and rank equally with the company's other unsecured senior indebtedness. See the IPO prospectus for extensive additional information on the equity units and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.
