PrefBlog

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 8 million cumulative redeemable preference shares, series R (the “Series R Preferred Shares”) at a price of $25.00 per share for distribution to the public. The aggregate gross proceeds will be $200 million. Closing of the offering is expected on December 5, 2012.

The holders of Series R Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding June 1, 2019. The first quarterly dividend payment date is scheduled for March 1, 2013. The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.50 per cent. The Series R Preferred Shares are redeemable by Enbridge, at its option, on June 1, 2019 and on June 1 of every fifth year thereafter.

The holders of Series R Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series S (the “Series S Preferred Shares”), subject to certain conditions, on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of Series S Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.50 per cent.

Enbridge has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2 million Series R Preferred Shares at a price of $25.00 per share.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by Scotiabank, RBC Capital Markets, and TD Securities Inc.

Update: Upsized to $400-million:

Enbridge Inc. (TSX:ENB)(NYSE:ENB) today announced that as a result of strong investor demand for its previously announced offering of cumulative redeemable preference shares, series R (the “Series R Preferred Shares”), the size of the offering has been increased to 16 million shares. The aggregate gross proceeds will be CAD$400 million. Closing of the offering is expected on December 5, 2012.

The holders of Series R Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding June 1, 2019. The first quarterly dividend payment date is scheduled for March 1, 2013. The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.50 per cent. The Series R Preferred Shares are redeemable by Enbridge, at its option, on June 1, 2019 and on June 1 of every fifth year thereafter.

The holders of Series R Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series S (the “Series S Preferred Shares”), subject to certain conditions, on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of Series S Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.50 per cent.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by Scotiabank, RBC Capital Markets, and TD Securities Inc.

Update, 2012-11-27: Rated Pfd-2(low) by DBRS.

This entry was posted on Monday, November 26th, 2012 at 1:13 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.