Due to total lack of communication from Enbridge, it was necessary for me to write an eMail:
Subject: ENB.PR.B
I understand that this issue will reset on June 1, 2017.
What will be the dividend reset rate? Where may I find a copy of the news release?
Sincerely,
Enbridge’s Investor Relations department replied (emphasis added):
Thank you for your email and interest in Enbridge.
We are rolling both the Series B (ENB.PR.B) and Series J (ENB.PR.U) preferred shares.
The deadline for the registered shareholder, CDS & Co., to provide notice of exercise of the right to convert Series B Preference Shares into Series C Preference Shares is 5:00 p.m. (Toronto time) on May 17, 2017.
The annual dividend rate applicable to the Series B (ENB.PR.B) Preference Shares for the five-year period from and including June 1, 2017 to but excluding June 1, 2022 will be 3.415%, being equal to the 5-year Government of Canada bond yield determined as of May 2, 2017, plus 2.40%, as determined in accordance with the terms of the Series B Preference Shares.The dividend rate applicable to the Series C Preference Shares for the 3-month floating rate period from and including June 1, 2017 to but excluding September 1, 2017 will be 0.744% (2.950% on an annualized basis), being equal to the sum of the three month Government of Canada treasury bills, plus 2.40%, on an actual/366 day count basis, as determined in accordance with the terms of the Series C Preference Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter and registered holders will be provided with notice thereof.
The deadline for the registered shareholder, CDS & Co., to provide notice of exercise of the right to convert Series J Preference Shares into Series K Preference Shares is 5:00 p.m. (Toronto time) on May 17, 2017.
The annual dividend rate applicable to the Series J Preference Shares (ENB.PR.U) for the five-year period from and including June 1, 2017 to but excluding June 1, 2022 will be 4.887%, being equal to the 5-year United States treasury bond yield determined as of May 2, 2017, plus 3.05%, as determined in accordance with the terms of the Series J Preference Shares.
The dividend rate applicable to the Series K Preference Shares for the 3-month floating rate period from and including June 1, 2017 to but excluding September 1, 2017 will be 0.978% (3.880% on an annualized basis), being equal to the sum of the three month United States Government treasury bills, plus 3.05%, on an actual/366 day count basis, as determined in accordance with the terms of the Series K Preference Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter and registered holders will be provided with notice thereof.
On May 4th, 2017 a notification was sent out by the CDS (Clearing and Depository Services Inc.) to brokerage firms for both the Series B (ENB.PR.B) and Series J (ENB.PR.U) via email, bulletin link or swift notification which outlined the reset terms of these preferred series.
Under the terms of the prospectus, we fulfilled our obligation to notify CDS at which point the information is distributed to participants. The CDS notification included the fixed and floating reset rates.
Kind Regards,
Note that the deadline to advise the company if you wish to convert holdings of ENB.PR.B is 5:00 p.m. (Toronto time) on May 17, 2017..
I will have post a recommendation regarding such a conversion on Friday May 12.
I consider it an absolute disgrace that Enbridge holds its preferred shareholders in such disdain that it refuses to issue a press release to advise them of the rate and deadlines. Virtually every other company with FixedResets outstanding does so as a matter of course.
Thank you for getting on them! I was just notified by investorline yesterday of the option to convert. Certainly not a lot of time to make a decision. Look forward to your next post.
The div on ENB.PR.U went up on reset!
Yes, enb.pr.U will reset at at 4.887% for a yeld of 5.17% at todays pricing while enb.pr.b will reset at 3.415% for a yeld of 4.73% at todays bid. Quite a big gap in actual yeld betweenthe two issues and it is not clear why in my mind.
In three months enb.pf.u will also reset and this one also may see a nice bump in rate if the US interest trend continues.( If it were to sreset today it would hit 4.99%)
Does anyone knows if enb.pr.u is the first rate reset to reset at a higher rate?
I also wonder if converting enb.pr.u to the variable rate is a worthwhile option given the 1 pc gap in yeld between the 5 year rate and the current 3 month rate. On Canadian issues there are comparables on which to base an analysis on but I am not aware of any floating US issues to do a similar analysis.
Anyway it is nice to see that rate resets can also go up and not get recalled….
For those of you who track US$ Preferred Shares it should be noted that
Enbridge Investor Relations has given me the following reply to my request for information regarding the conversion of Series J shares (ENB.PR.U) to Floating Resets.
Hello Fred,
Thank you for your email and interest in Enbridge.
In regards to the Series J preferred shares, because not enough elected to convert, there will be no conversion into Series K.
Best,
Nicole
[…] as a FixedReset, 4.00%+240, that commenced trading 2011-9-30 after being announced 2011-9-21. It reset to 3.415% in 2017; I recommended against conversion; but there was an 8% conversion to the FloatingReset, […]
[…] as a FixedReset, 4.00%+240, that commenced trading 2011-9-30 after being announced 2011-9-21. It reset to 3.415% in 2017; I recommended against conversion; but there was an 8% conversion to the FloatingReset, […]