DBRS commented on the Enbridge deal:
DBRS Limited (DBRS) notes that Enbridge Inc. (ENB; rated BBB (high) with a Stable trend by DBRS), the parent of Westcoast Energy Inc. (Westcoast or the Company; rated A (low) with a Stable trend by DBRS), has announced that it has agreed to sell its Canadian natural gas gathering and processing business in British Columbia (B.C.) and Alberta to Brookfield Infrastructure Partners and its institutional partners for a cash purchase price of $4.31 billion, subject to customary closing adjustments and receipt of regulatory approvals. The assets include 19 natural gas processing plants and liquids handling facilities with a total operating capacity of 3.3 billion cubic feet per day and 3,550 kilometres of natural gas gathering pipelines. ENB has entered into separate sale agreements for those assets governed by provincial regulations in Alberta and B.C. and those governed by federal National Energy Board (NEB) regulations. The sale of the provincially regulated assets is expected to close in 2018, while the sale of the federally regulated assets is expected to close in mid-2019.
…
DBRS views the sale of Westcoast’s gas gathering and processing business as moderately positive for the Company’s business risk profile, as it eliminates volume risk. However, in the absence of detailed information on the EBITDA for the assets being sold and how the proceeds will be used at the Westcoast level, the impact of the sale on Westcoast’s financial risk profile is not clear at this time. DBRS expects ENB to use the proceeds of the sale that are directly owned by Westcoast in a manner that will maintain Westcoast’s financial metrics at levels consistent with the current ratings and will review details of the sale, regulatory approvals and use of proceeds as they become available.
With respect to ENB, DBRS believes that the transaction is consistent with the goals of ENB’s previously communicated strategic plan and financial outlook and is supportive of the current ratings.
PerpetualDiscounts now yield 5.47%, equivalent to 7.11% interest at the standard equivalency factor of 1.3x. Long corporates now yield a little under 3.85%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”> is now about 325bp, a significant narrowing from the 335bp reported June 27.
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices
Values are provisional and are finalized monthly |
| Index |
Mean
Current
Yield
(at bid) |
Median
YTW |
Median
Average
Trading
Value |
Median
Mod Dur
(YTW) |
Issues |
Day’s Perf. |
Index Value |
| Ratchet |
0.00 % |
0.00 % |
0 |
0.00 |
0 |
-0.9081 % |
2,999.7 |
| FixedFloater |
0.00 % |
0.00 % |
0 |
0.00 |
0 |
-0.9081 % |
5,504.3 |
| Floater |
3.35 % |
3.58 % |
75,660 |
18.38 |
4 |
-0.9081 % |
3,172.1 |
| OpRet |
0.00 % |
0.00 % |
0 |
0.00 |
0 |
0.0874 % |
3,182.5 |
| SplitShare |
4.62 % |
4.53 % |
66,745 |
4.95 |
5 |
0.0874 % |
3,800.6 |
| Interest-Bearing |
0.00 % |
0.00 % |
0 |
0.00 |
0 |
0.0874 % |
2,965.4 |
| Perpetual-Premium |
5.62 % |
-9.01 % |
58,238 |
0.09 |
9 |
0.0044 % |
2,895.9 |
| Perpetual-Discount |
5.36 % |
5.47 % |
57,210 |
14.61 |
26 |
-0.0801 % |
2,981.0 |
| FixedReset |
4.32 % |
4.65 % |
133,540 |
5.62 |
106 |
0.0316 % |
2,539.1 |
| Deemed-Retractible |
5.15 % |
5.76 % |
67,305 |
5.51 |
27 |
-0.0982 % |
2,967.5 |
| FloatingReset |
3.11 % |
3.60 % |
34,619 |
3.42 |
9 |
0.2549 % |
2,805.6 |
| Performance Highlights |
| Issue |
Index |
Change |
Notes |
| IFC.PR.C |
FixedReset |
-1.30 % |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.70
Bid-YTW : 5.73 % |
| MFC.PR.Q |
FixedReset |
-1.30 % |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.23
Bid-YTW : 5.30 % |
| BAM.PR.C |
Floater |
-1.05 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 16.89
Evaluated at bid price : 16.89
Bid-YTW : 3.59 % |
| BAM.PR.K |
Floater |
-1.05 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 16.95
Evaluated at bid price : 16.95
Bid-YTW : 3.58 % |
| TRP.PR.F |
FloatingReset |
1.05 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 20.26
Evaluated at bid price : 20.26
Bid-YTW : 3.96 % |
| TRP.PR.H |
FloatingReset |
1.13 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 17.00
Evaluated at bid price : 17.00
Bid-YTW : 3.77 % |
| TRP.PR.G |
FixedReset |
1.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 23.07
Evaluated at bid price : 24.00
Bid-YTW : 5.04 % |
| MFC.PR.M |
FixedReset |
1.23 % |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.08
Bid-YTW : 5.76 % |
| TRP.PR.C |
FixedReset |
1.31 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 17.77
Evaluated at bid price : 17.77
Bid-YTW : 4.79 % |
| Volume Highlights |
| Issue |
Index |
Shares
Traded |
Notes |
| SLF.PR.G |
FixedReset |
111,100 |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.55
Bid-YTW : 7.34 % |
| SLF.PR.D |
Deemed-Retractible |
50,945 |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.53
Bid-YTW : 7.18 % |
| POW.PR.D |
Perpetual-Discount |
42,090 |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 22.67
Evaluated at bid price : 22.91
Bid-YTW : 5.47 % |
| IFC.PR.G |
FixedReset |
41,100 |
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.71
Bid-YTW : 5.17 % |
| TRP.PR.C |
FixedReset |
31,200 |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 17.77
Evaluated at bid price : 17.77
Bid-YTW : 4.79 % |
| NA.PR.G |
FixedReset |
30,060 |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 23.14
Evaluated at bid price : 25.02
Bid-YTW : 4.78 % |
| There were 6 other index-included issues trading in excess of 10,000 shares. |
| Wide Spread Highlights |
| Issue |
Index |
Quote Data and Yield Notes |
| MFC.PR.N |
FixedReset |
Quote: 23.30 – 24.60
Spot Rate : 1.3000
Average : 0.7313
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.30
Bid-YTW : 5.50 % |
| TRP.PR.A |
FixedReset |
Quote: 20.24 – 21.32
Spot Rate : 1.0800
Average : 0.6656
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 20.24
Evaluated at bid price : 20.24
Bid-YTW : 4.85 % |
| MFC.PR.M |
FixedReset |
Quote: 23.08 – 23.95
Spot Rate : 0.8700
Average : 0.5716
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.08
Bid-YTW : 5.76 % |
| IFC.PR.C |
FixedReset |
Quote: 22.70 – 23.29
Spot Rate : 0.5900
Average : 0.3849
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.70
Bid-YTW : 5.73 % |
| BAM.PR.X |
FixedReset |
Quote: 18.18 – 18.59
Spot Rate : 0.4100
Average : 0.2863
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2048-07-04
Maturity Price : 18.18
Evaluated at bid price : 18.18
Bid-YTW : 4.98 % |
| MFC.PR.Q |
FixedReset |
Quote: 24.23 – 24.65
Spot Rate : 0.4200
Average : 0.3039
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.23
Bid-YTW : 5.30 % |