Why NextEra Energy Partners Slumped Another 13% in November
Shares of NextEra Energy Partners (NYSE: NEP) tumbled another 13% in November, according to data provided by S&P Global Market Intelligence. With that decline, the renewable energy stock has now lost about two-thirds of its value this year. Investors continue to question the company's ability to achieve its reset growth outlook, even as it makes progress with its strategic plan.
NextEra Energy Partners has been under pressure all year over concerns about its finances. The company relied heavily on convertible portfolio equity financing (CEPF) with institutional investors to fund its growth in recent years. Those financings are starting to mature. With interest rates rising and its stock price crashing, the company's cost of capital has skyrocketed, making it more expensive to redeem this funding while securing new financing to continue growing.
The company has taken steps to address this issue, including unveiling a plan in May to transition to a pure-play renewable energy producer by selling its natural gas pipeline assets. It intends to use that cash to redeem its CEPFs and fund new acquisitions.
Source Fool.com
