PrefBlog

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 12 million cumulative redeemable preference shares, series b (the “Series B Preferred Shares”) at a price of $25.00 per share for distribution to the public. Closing of the offering is expected on or about September 30, 2011.

The holders of Series B 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 ending June 1, 2017. The first quarterly dividend payment date is scheduled for March 1, 2012. The dividend rate will reset on June 1, 2017 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.40% per cent. The Series B Preferred Shares are redeemable by Enbridge, at its option, on June 1, 2017 and on June 1 of every fifth year thereafter.

The holders of Series B Preferred Shares will have the right to convert their shares into cumulative redeemable preferred shares series C (the “Series C Preferred Shares”), subject to certain conditions, on June 1, 2017 and on June 1 of every fifth year thereafter. The holders of Series C 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 2.40% 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 two million Series B 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 reduce outstanding indebtedness, for capital expenditures and for general corporate purposes.

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

It is my understanding that the issue has been biggie-sized to $500-million, but I don’t see anything from the company about this.

Update: Rated Pfd-2(low) by DBRSDBRS has today assigned a rating of Pfd-2 (low) with a Stable trend to Enbridge Inc.’s (Enbridge’s or the Company’s) $500 million Cumulative Redeemable Preferred Shares, Series B (the Series B Preferred Shares), which have a dividend rate of 4.0% per annum, payable quarterly for the initial five-year period ending June 1, 2017. The dividend rate will reset on June 1, 2017, and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.40%. The Series B Preferred Shares are redeemable by Enbridge on June 1, 2017, and on June 1 every five years thereafter.

This entry was posted on Wednesday, September 21st, 2011 at 2:40 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.