PrefBlog

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series 9 (Series 9 Shares) (TSX: ENB.PF.A) on December 1, 2024. As a result, subject to certain conditions, the holders of the Series 9 Shares have the right to convert all or part of their Series 9 Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series 10 of Enbridge (Series 10 Shares) on December 1, 2024. Holders who do not exercise their right to convert their Series 9 Shares into Series 10 Shares will retain their Series 9 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 9 Shares outstanding after December 1, 2024, then all remaining Series 9 Shares will automatically be converted into Series 10 Shares on a one-for-one basis on December 1, 2024; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series 10 Shares outstanding after December 1, 2024, no Series 9 Shares will be converted into Series 10 Shares. There are currently 11,000,000 Series 9 Shares outstanding.

With respect to any Series 9 Shares that remain outstanding after December 1, 2024, 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 9 Shares for the five-year period commencing on December 1, 2024 to, but excluding, December 1, 2029 will be 5.672 percent, being equal to the five-year Government of Canada bond yield of 3.012 percent determined as of today plus 2.66 percent in accordance with the terms of the Series 9 Shares.

With respect to any Series 10 Shares that may be issued on December 1, 2024, 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 10 Shares for the three-month floating rate period commencing on December 1, 2024 to, but excluding, March 1, 2025 will be 1.55342 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 3.64 percent plus 2.66 percent in accordance with the terms of the Series 10 Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series 9 Shares who wish to exercise their right of conversion during the conversion period, which runs from November 1, 2024 until 5:00 p.m. (EST) on November 18, 2024, 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.PF.A was issued as a FixedReset, 4.40%+266, that commenced trading 2014-3-13 after being announced 2014-3-4. It reset to 4.097% effective 2019-12-1 and there was no conversion. Enbridge issues were upgraded to Pfd-2(low) by DBRS in June, 2024. ENB.PF.A is tracked by HIMIPref™ and is currently assigned to the FixedReset (Discount) subindex.

Update, 2024-11-18: No conversion:

Enbridge Inc. (TSX: ENB) (NYSE: ENB) (Enbridge) announced today that none of its outstanding Cumulative Redeemable Preference Shares, Series 9 (Series 9 Shares) will be converted into Cumulative Redeemable Preference Shares, Series 10 (Series 10 Shares) on December 1, 2024.

After taking into account all conversion notices received from holders of its outstanding Series 9 Shares by the November 18, 2024 deadline for the conversion of the Series 9 Shares into Series 10 Shares, less than the 1,000,000 Series 9 Shares required to give effect to conversions into Series 10 Shares were tendered for conversion.

This entry was posted on Friday, November 1st, 2024 at 9:13 pm and is filed under Issue Comments. 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.