QUANTUMONLINE.COM SECURITY DESCRIPTION: NextEra Energy, Inc. 4.872% 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 Series J Debenture due September 1, 2024, 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 9/1/2022 and pays a contract adjustment rate of 2.772% per annum. The stock purchase settlement rate will be 0.1785 shares per unit if the then current market price is equal to or greater than $280.15 and 0.2231 shares per unit if the market price is equal to or less than $224.12. The stock purchase settlement rate will be 0.7156 shares per unit if the then current market price is equal to or greater than $69.91 and 0.8940 shares per unit if the market price is equal to or less than $55.93. 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 9/04/2019 was $224.12 per share. The stock purchase contract may be settled any time at the holder’s option and the company will deliver 0.1785 0.7156 shares of common stock for each purchase contract.
The Equity Units pay quarterly distributions of 4.872% ($2.436 per annum or $0.609 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).
The Series J Debenture will initially bear interest at a rate of 2.10% per year, payable quarterly in arrears. The Series J Debenture is due 9/1/2024 and is subject to reset and remarketing on the fifth business day prior to 9/1/2022. If the remarketing is successful, the interest rate on the Series J Debenture will be reset and thereafter interest will be payable semi-annually at the reset rate.
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 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.
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.