Enbridge Inc. has announced:
that it has entered into an agreement with a group of underwriters to sell eight million Cumulative Redeemable Preference Shares, Series 15 (the “Series 15 Preferred Shares”) at a price of $25.00 per share for distribution to the public. Closing of the offering is expected on September 23, 2014.
The holders of Series 15 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.10 per share, payable quarterly on the first day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.40 per cent per annum, for the initial fixed rate period to but excluding September 1, 2020. The first quarterly dividend payment date is scheduled for December 1, 2014. The dividend rate will reset on September 1, 2020 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.68 per cent. The Series 15 Preferred Shares are redeemable by Enbridge, at its option, on September 1, 2020 and on September 1 of every fifth year thereafter.
The holders of Series 15 Preferred Shares will have the right to convert their shares into Cumulative Redeemable Preference Shares, Series 16 (the “Series 16 Preferred Shares”), subject to certain conditions, on September 1, 2020 and on September 1 of every fifth year thereafter. The holders of Series 16 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 90-day Government of Canada Treasury bill rate plus 2.68 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 15 Preferred Shares at a price of $25.00 per share.
The offering is being made only in Canada by means of a prospectus supplement to the base shelf prospectus of the Corporation dated September 2, 2014. 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 led by TD Securities Inc., CIBC World Markets, RBC Capital Markets, and Scotiabank.
Later, they added:
that as a result of strong investor demand for its previously announced offering of Cumulative Redeemable Preference Shares, Series 15 (the “Series 15 Preferred Shares”), the size of the offering has been increased to 11 million Series 15 Preferred Shares. The aggregate gross proceeds will be C$275 million. Closing of the offering is expected on September 23, 2014.
Of the many very closely related ENB FixedResets available, the new issue is most comparable to ENB.PF.C, 4.40%+264, which closed today at 24.99-19, 9×29, and ENB.PF.E, 4.40%+266, which closed at 25.00-02, 17×19. Not much of a new-issue concession here!
Update, 2014-9-17: Rated Pfd-2(low) [Stable] by DBRS.