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NextEra Energy Partners secures $5B interest rate swaps

NextEra Energy Partners subsidiary NextEra Energy US Partners Holdings LLC secured two ten-year forward-starting interest rate swaps with a total notional value of $5 billion.

The company entered into the swaps to manage interest rate risk associated with forecast debt issuances over the next ten years. The forward swaps require mandatory cash settlement on March 26, 2028 based on NextEra Energy Partners paying a fixed interest rate of 3.192% per year for a period of ten years through March 26, 2038 and in return receiving the three-month London Interbank Offered Rate for that period.

NextEra Energy Partners may terminate all or a portion of the swaps at any time prior to March 26, 2028 to hedge interest rates for a period of ten years on debt issuances during that period, according to the filing.

Bank of America NA acted as the forward counterparty. All obligations to BofA are secured by the collateral that secures the loans under an outstanding revolving credit facility on an equivalent and pro rata basis with the principal of such loans, and are guaranteed by NextEra Energy Operating Partners and NextEra Energy Partners.