By Cristal Cody
Prospect News, Nov. 26 - Enbridge Inc. said on Monday that it doubled its initial offering and sold C$400 million of cumulative redeemable preference shares to yield a 4% dividend for the initial period up to but excluding June 1, 2019.
The company sold 16 million shares of the series R preferred stock (Baa3/BBB/DBRS: Pfd-2) at C$25.00 per share. The deal was upsized from C$200 million, or 8 million shares.
Scotia Capital Inc., RBC Capital Markets and TD Securities Inc. were the lead managers.
The series R preferred shares are redeemable by Enbridge on June 1, 2019 and on June 1 of every fifth year thereafter.
The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 250 basis points.
The holders will have the right to convert their shares into series S cumulative redeemable preference shares on June 1, 2019 and on June 1 of every fifth year thereafter and receive quarterly floating-rate cumulative dividends at a rate equal to the sum of the then 90-day Government of Canada Treasury bill rate plus 250 bps.
The Calgary, Alta.-based oil and gas distributor and transportation company plans to use the proceeds to partially fund capital projects, to reduce existing debt and for other general corporate purposes.
Issuer: | Enbridge Inc.
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Amount: | C$400 million, 16 million shares
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Maturity: | June 1, 2019
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Securities: | Cumulative redeemable preference shares
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Bookrunners: | Scotia Capital Inc., RBC Capital Markets, TD Securities Inc.
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Dividend: | 4%; resets June 1, 2019 and every five years thereafter at five-year government bond yield plus 250 bps
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Price: | C$25.00 per share
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Call feature: | June 1, 2019 and on June 1 of every fifth year thereafter
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Pricing date: | Nov. 26
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Settlement date: | Dec. 5
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Ratings: | Moody's: Baa3
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| Standard & Poor's: BBB
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| DBRS: Pfd-2
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Distribution: | Canada
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