Cleco Securitization II LLC Annual Report: A Simple Breakdown

I’ve put together this guide to help you understand how Cleco Securitization II LLC performed this year. My goal is to cut through the financial jargon and give you the facts you need to decide if this investment fits your goals.

1. What does this company do?

Cleco Securitization II LLC is a "special purpose vehicle." It isn't a typical company that sells products. Think of it as a financial "vault" created by Cleco Power LLC. Its only job is to hold the right to collect "storm recovery charges" from Cleco Power’s utility customers. It manages the $200 million in Energy Transition Bonds issued to investors. It has no employees or office. It exists solely to ensure these bonds, which pay 4.85% interest, are paid off on time.

2. Financial performance

Because this is a financial tool, it doesn't report "profit" like a normal business. Its life is tied to bond payments. For the year ending December 31, 2025, the company collected $14.2 million in storm recovery charges. It used these funds to pay $9.7 million in interest to bondholders and $4.5 million for principal and fees. The company has no complex investments that could hide risks to your money.

3. How the "plumbing" works

Strict legal agreements govern how this company works. Cleco Power acts as the "servicer." They collect storm recovery charges from customers and send the money to the trustee, U.S. Bank Trust Company, N.A., within two business days. Independent auditors, including PricewaterhouseCoopers, confirmed that these processes are working correctly. They also verified the "True-Up" mechanism, which lets the company adjust charges annually to ensure the bonds are fully paid by November 15, 2040.

4. Financial health and safety

The company is "bankruptcy remote." This means that if Cleco Power faces financial trouble, this "vault" remains legally separate to protect bondholders. The assets are legally owned by the LLC, so they are off-limits to Cleco Power’s creditors. An independent manager, who has no ties to Cleco Power, ensures the company stays focused on its only job: paying off the $200 million debt.

5. Key risks

The main risk is Cleco Power itself. Because they handle the billing, bondholders rely on them to keep things running. If Cleco Power faces major system failures or if the Louisiana Public Service Commission changes how charges are approved, payments could be disrupted. Also, if the number of utility customers drops significantly, the company may need to increase charges for remaining customers to keep the cash flowing.

6. Future outlook

The company’s future is set by a 15-year payment schedule. It will continue its work until the bonds are paid off by November 15, 2040. There are no plans for growth or new products. It is a steady, predictable machine designed to run until the debt is retired.

7. The bottom line

This isn't a stock for growth. It is a structured investment tied to specific bond payments. If you want a predictable, low-drama investment with a fixed return backed by utility charges, this fits. If you want a company that will innovate or grow, look elsewhere. View this as a long-term, fixed-income investment rather than a traditional stock.

Decision Checklist:

• Are you looking for steady income? This investment is designed for predictable, fixed-income payments.
• Are you comfortable with a long-term horizon? This is a commitment that runs through 2040.
• Do you prefer stability over growth? This vehicle is built to be a "machine" that pays debt, not a company that expands or innovates.