JUNO BEACH, Fla., Aug. 29, 2016 /PRNewswire/ -- NextEra
Energy, Inc. (NYSE: NEE) today announced that it has secured access
to a broad contingent of leading financial institutions to act as
financial advisors related to its previously announced definitive
agreement to acquire 100 percent of the equity of reorganized
Energy Future Holdings Corp. ("EFH") and certain of its direct and
indirect subsidiaries, including EFH's approximately 80 percent
indirect interest in Oncor Electric Delivery Company LLC
("Oncor").
The contingent of financial institutions is led by Credit Suisse
Securities (USA) LLC and Bank of
America Merrill Lynch and includes Deutsche Bank Securities Inc.,
Goldman, Sachs & Co., J.P. Morgan Securities LLC, UBS
Securities LLC, Wells Fargo Securities, LLC, BNP Paribas Securities
Corp., CIBC World Markets Corp., Credit Agricole Corporate and
Investment Bank, KeyBanc Capital Markets Inc., Mizuho Securities
USA Inc., Scotiabank Capital
(USA) Inc., Sumitomo Mitsui
Banking Corporation, TD Securities (USA) LLC, The Bank of Tokyo-Mitsubishi UFJ,
LTD. and U.S. Bank National Association. Under agreements entered
into with these financial institutions, the entities have agreed to
serve as financial advisors on the acquisition of Oncor. NextEra
Energy's access to these institutions to support the Oncor
transaction demonstrates its strong reputation as a borrower and
significantly strengthens the ability of NextEra Energy to obtain
financing for the proposed transaction.
"We are pleased to have reached agreements with this
well-respected contingent of global banks, which provide further
assurance of our ability to finance our proposed acquisition of
Oncor," said Jim Robo, chairman and
chief executive officer of NextEra Energy. "These agreements
underscore NextEra Energy's financial strength and our longstanding
relationships with a number of leading financial institutions. We
appreciate the trust they have placed in our company and look
forward to bringing this financial strength and additional
financial resources to the combined company for the benefit of
Oncor and its customers."
As part of the Oncor transaction, NextEra Energy intends to fund
$9.5 billion, primarily for the
repayment of approximately all of the Energy Future Intermediate
Holding Company LLC ("EFIH") debt. It is expected that certain
creditors will be paid primarily in cash with the remainder in
NextEra Energy common stock. The number of shares issuable to
creditors will be determined based on the estimated cash on hand at
EFH at the closing of the transaction, the volume weighted average
price of NextEra Energy common stock for a specified number of days
leading up to the closing and other factors specified in the
definitive agreement. NextEra Energy intends to use a combination
of debt, convertible equity units and proceeds from asset sales to
fund cash being provided to creditors.
The Oncor transaction is not subject to any financing
contingencies. NextEra Energy intends to repay in full the EFIH
first lien debtor-in-possession ("DIP") financing facility
(currently approximately $5.4 billion
principal amount) using cash financed by a non-EFH/Oncor NextEra
Energy affiliate upon closing. As part of EFH's plan of
reorganization, the transaction would extinguish all EFH and EFIH
debt that currently exists above Oncor.
Earlier this month, NextEra Energy sold $1.5 billion of convertible equity units. The net
proceeds from the sale of the convertible equity units will be
used, among other things, to finance the Oncor transaction. The
remaining amount of the $9.5 billion
for the Oncor transaction will be funded with debt, equity and
capital recycling in a manner that should allow NextEra Energy to
maintain its strong credit ratings and allow Oncor to improve its
credit ratings.
Benefits to Oncor and its customers
The agreements with these financial institutions will support
NextEra Energy's proposed combination with Oncor, which will
improve Oncor's financial strength and generate tangible benefits
for Oncor's customers. Upon completion of the transaction, Oncor
will join a family of companies that shares its commitment to
making the smart, long-term investments necessary to maintain and
support affordable, reliable electric service. The proposed
transaction will, among other things:
- Extinguish all EFH and EFIH debt that currently resides above
Oncor immediately following closing;
- Improve Oncor's financial strength and credit ratings – based
solely on the news of the merger announcement, Moody's Investors
Service upgraded Oncor's senior secured credit rating from Baa1 to
A3 and placed the rating on review for further upgrade. In
addition, Standard & Poor's Financial Services revised Oncor's
outlook to positive from developing and Fitch Ratings placed Oncor
on Rating Watch Positive;
- Ensure the support of Oncor's existing five-year capital plan,
which includes substantial and necessary planned capital
improvement projects across the state;
- Enhance Oncor's ability to provide safe, reliable and
affordable electric delivery service to its customers well into the
future by partnering with a world-class energy company with a
long-term commitment to Texas;
- Retain local management, the Dallas headquarters and the Oncor name;
- Provide workforce stability and protections for Oncor
employees, including no involuntary workforce reductions at Oncor
for at least two years after the transaction closes;
- Embrace a robust set of regulatory and governance requirements,
pertaining to electric reliability, operations, employee
protection, accounting, ratemaking, code of conduct and Public
Utility Commission of Texas
reporting commitments; and
- Eliminate the financial risks created by the 2007 EFH
acquisition and facilitate the resolution of the EFH
bankruptcy.
Merger approval process
The transaction is subject to bankruptcy court approval of the
merger agreement and EFH's plan of reorganization, approval by the
Public Utility Commission of Texas, the expiration or termination of the
waiting period under the Hart-Scott-Rodino Act, approval by the
Federal Energy Regulatory Commission and other customary conditions
and approvals.
NextEra Energy expects the transaction, which has been approved
by the boards of directors of both NextEra Energy and EFH, to be
completed in the first quarter of 2017.
NextEra Energy, Inc.
NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy
company with consolidated revenues of approximately $17.5 billion and approximately 14,300 employees
in 27 states and Canada as of
year-end 2015, as well as approximately 45,000 megawatts of
generating capacity, which includes megawatts associated with
noncontrolling interests related to NextEra Energy Partners, LP
(NYSE: NEP) as of April 2016.
Headquartered in Juno Beach, Fla.,
NextEra Energy's principal subsidiaries are Florida Power & Light Company, which serves
more than 4.8 million customer accounts in Florida and is one of the largest
rate-regulated electric utilities in the
United States, and NextEra Energy Resources, LLC, which,
together with its affiliated entities, is the world's largest
generator of renewable energy from the wind and sun. Through its
subsidiaries, NextEra Energy generates clean, emissions-free
electricity from eight commercial nuclear power units in
Florida, New Hampshire, Iowa and Wisconsin. A Fortune 200 company and included
in the S&P 100 index, NextEra Energy has been recognized often
by third parties for its efforts in sustainability, corporate
responsibility, ethics and compliance, and diversity, and has been
ranked No. 1 in the electric and gas utilities industry in
Fortune's 2016 list of "World's Most Admired Companies." For more
information about NextEra Energy companies, visit these websites:
www.NextEraEnergy.com, www.FPL.com,
www.NextEraEnergyResources.com.
Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or
phrases such as "may," "will," "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "predict," and "target" and
other words and terms of similar meaning. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. NEE cautions
readers that any forward-looking statement is not a guarantee of
future performance and that actual results could differ materially
from those contained in any forward-looking statement. Such
forward-looking statements include, but are not limited to,
statements about the anticipated benefits of the proposed merger
involving NEE and EFH, including future financial or operating
results of NEE or Oncor, NEE's, EFH's or Oncor's plans, objectives,
expectations or intentions, the expected timing of completion of
the transaction, the value, as of the completion of the merger or
as of any other date in the future, of any consideration to be
received in the merger in the form of stock or any other security,
NEE's ability to finance the transaction, anticipated changes to
the credit ratings of NEE or Oncor, and other statements that are
not historical facts. Important factors that could cause actual
results to differ materially from those indicated by any such
forward-looking statements include risks and uncertainties relating
to: the risk that EFH may be unable to obtain bankruptcy court
approval and that NEE, EFH or Oncor may be unable to obtain
governmental and regulatory approvals required for the merger, or
required bankruptcy court and governmental and regulatory approvals
may delay the merger or result in the imposition of conditions that
could cause the parties to abandon the transaction; the risk that a
condition to closing of the merger may not be satisfied; the
expected timing to consummate the proposed merger; the risk that
the businesses will not be integrated successfully; the risk that
the cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to
maintain relationships with customers, employees or suppliers; the
diversion of management time and attention on merger-related
issues; general worldwide economic conditions and related
uncertainties; the effect and timing of changes in laws or in
governmental regulations (including environmental); fluctuations in
trading prices of securities of NEE and in the financial results of
NEE, EFH or Oncor or any of their subsidiaries; the timing and
extent of changes in interest rates, commodity prices and demand
and market prices for electricity; and other factors discussed or
referred to in the "Risk Factors" section of Oncor's or NEE's most
recent Annual Reports on Form 10-K filed with the Securities and
Exchange Commission ("SEC"). These risks, as well as other risks
associated with the merger, will be more fully discussed in
subsequent filings with the SEC in connection with the merger.
Additional risks and uncertainties are identified and discussed in
NEE's and Oncor's reports filed with the SEC and available at the
SEC's website at www.sec.gov. Each forward-looking statement speaks
only as of the date of the particular statement and NEE does not
undertake any obligation to update or revise its forward-looking
statements, whether as a result of new information, future events
or otherwise.
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SOURCE NextEra Energy, Inc.