OREANDA-NEWS. S&P Global Ratings today assigned its 'BBB' rating to NextEra Energy's $1.5 billion 1.65% series I equity units due Sept. 1, 2021. The equity units consist of a purchase contract that obligates the owner to purchase NextEra's common stock in September 2019 and a remarketable debenture. NextEra plans to use the proceeds from the issuance to fund a portion of its proposed acquisition of Oncor Electric Delivery Co. LLC.

We view these hybrid securities as having high (100%) equity content. The rating on the equity units applies to the company's obligation to service the underlying debt component, as well as its obligation to issue common shares under the forward contract. Under our criteria, we rate these securities 'BBB', two notches below our 'A-' issuer credit rating on NextEra.

For the corporate credit rating rationale, see the research update on NextEra published Aug. 2, 2016.