PrefBlog

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series 1 (Series 1 Shares) (TSX: ENB.PR.V) on June 1, 2023. As a result, subject to certain conditions, the holders of the Series 1 Shares have the right to convert all or part of their Series 1 Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series 2 of Enbridge (Series 2 Shares) on June 1, 2023. Holders who do not exercise their right to convert their Series 1 Shares into Series 2 Shares will retain their Series 1 Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series 1 Shares outstanding after June 1, 2023, then all remaining Series 1 Shares will automatically be converted into Series 2 Shares on a one-for-one basis on June 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series 2 Shares outstanding after June 1, 2023, no Series 1 Shares will be converted into Series 2 Shares. There are currently 16,000,000 Series 1 Shares outstanding.

With respect to any Series 1 Shares that remain outstanding after June 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series 1 Shares for the five-year period commencing on June 1, 2023 to, but excluding, June 1, 2028 will be 6.7037 percent, being equal to the five-year United States Treasury bond yield of 3.5637 percent determined as of today plus 3.14 percent in accordance with the terms of the Series 1 Shares.

With respect to any Series 2 Shares that may be issued on June 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series 2 Shares for the three-month floating rate period commencing on June 1, 2023 to, but excluding, September 1, 2023 will be 2.11474 percent, based on the annual rate on three month United States Government treasury bills for the most recent treasury bills auction of 5.25 percent plus 3.14 percent in accordance with the terms of the Series 2 Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series 1 Shares who wish to exercise their right of conversion during the conversion period, which runs from May 2, 2023 until 5:00 p.m. (EST) on May 17, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PR.V was issued in 2013 as a FixedReset, USD, 4.00%+314.

As the issue is denominated in USD, it is not tracked by HIMIPref™.

Thanks to Assiduous Reader Fuzzybear for bringing this to my attention!

This entry was posted on Tuesday, May 2nd, 2023 at 7:34 pm and is filed under Issue Comments, US Pay. 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.