OREANDA-NEWS. S&P Global Ratings today affirmed its ratings, including the 'A-' issuer credit rating, on NextEra Energy Inc. (NextEra) and its subsidiaries NextEra Energy Capital Holdings Inc. and Florida Power & Light Co. The outlook is stable.

In addition, we affirmed the rating on FPL Group Capital Trust I.

"The ratings affirmation follows NextEra's announcement that it entered into an agreement to acquire Energy Future Holdings Inc.'s (EFH) 80% indirect ownership interest in Oncor Electric Delivery Co. LLC (Oncor) for about $14.7 billion, including the assumption of debt from Oncor," said S&P global Ratings credit analyst Dimitri Nikas. NextEra will fund its portion of the transaction of about $9.5 billion with debt, $1.5 billion of equity units, and asset sale proceeds.

The ratings affirmation is based on our expectations that NextEra will maintain its current financial profile with funds from operations (FFO) to debt that is at least 25%-26% until the transaction closes. Moreover, we expect that upon the transaction close or shortly thereafter, NextEra will be in a position to exercise effective control over Oncor's resources and cash flows with no additional meaningful insulation imposed elsewhere; this would strengthen its business risk profile to offset the weakened financial profile that results from the proposed funding, and leave ratings at the current level. Paramount to the ratings affirmation is NextEra's commitment to maintain its current intermediate financial risk profile, if it is unable to achieve effective control over Oncor's resources and cash flows.

The stable outlook on NextEra and its subsidiaries reflects our expectation that the company will maintain its intermediate financial risk profile at least through the close of the Oncor acquisition. After the close of the transaction, we expect that NextEra will have effective control over Oncor as a result of which its business risk profile could strengthen and the increase in debt leverage would not affect ratings.

We would lower the ratings on NextEra and its subsidiaries if upon completion of the acquisition NextEra fails to achieve effective control over Oncor's resources and cash flows while at the same time its financial profile weakens such that FFO to debt remains consistently below 26% or if it does achieve effective control over Oncor and FFO to debt is below 18%.

Under our current base-case scenario we do not expect to raise the ratings on NextEra over the next 12 to 24 months as the company endeavors to complete the merger with Oncor and achieve effective control over the company.