NextEra yieldco IPO raises $442.7m

NextEra Energy Partners, the yieldco subsidiary of NextEra Energy, the largest US renewables generator, has closed its initial public offering, raising $442.7m net proceeds.

The offering included 16,250,000 common units. The underwriters exercised in full their option to purchase an additional 2,437,500 common units from NextEra Energy Partners at the $25 IPO price, less the underwriting discount.

BofA Merrill Lynch and Goldman Sachs acted as joint book-running managers and structuring agents for the offering, while Morgan Stanley acted as a joint book-running manager.

The common units list on the New York Stock Exchange under the symbol “NEP.”

NextEra Energy Partners intends to use a portion of the net proceeds to purchase common units of NextEra Energy Operating Partners, the entity that holds NextEra Energy Partners' project assets.

NextEra Energy Operating Partners, in turn, intends to use such net proceeds for general corporate purposes, including funding future acquisition opportunities.

The balance of IPO proceeds will be used by NextEra Energy Partners to purchase common units of NextEra Energy Operating Partners from an affiliate of NextEra Energy.

NEP will initially own 10 projects representing 990MW of capacity, 30% of it solar and the rest wind.

The newest will be the 60MW Bluewater wind farm in Ontario, Canada, which employs GE 1.6-100 turbines, and is slated for commercial operation in the third quarter of this year.

The oldest project in the portfolio will be the 174.3MW Northern Colorado wind farm, which began operation in 2009, and employs Siemens and GE turbines.

Of the solar capacity to be owned by NEP, 40MW is PV – all of it in Ontario – and the remaining 250MW will come from NextEra’s recently completed Genesis concentrated solar power project, in California.

Beyond its initial portfolio, NEP will have Right of First Offer on 1.55GW of additional capacity from its parent company – more than one-third of it solar, including the First Solar-developed 250MW Silver State South PV project in Nevada.

NEP will target an annual growth in the amount of cash available for distribution of 12-25%, NextEra says.