By Cristal Cody
Prospect News, Nov. 26 - Enbridge Inc. said on Monday that it sold C$200 million in an offering of 8 million cumulative redeemable preference shares to yield a 4% dividend for the initial period up to but excluding June 1, 2019.
The series R preferred stock (Baa3/BBB/DBRS: Pfd-2) priced at C$25.00 per share.
Scotia Capital Inc., RBC Capital Markets and TD Securities Inc. were the lead managers.
The deal includes an over-allotment option of 2 million shares.
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 2.5%.
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.
|
| Amount: | C$200 million, 8 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | June 1, 2019
|
| Securities: | Cumulative redeemable preference shares
|
| Bookrunners: | Scotia Capital Inc., RBC Capital Markets, TD Securities Inc.
|
| Dividend: | 4%, reset on June 1, 2019 and every fifth year thereafter at five-year government bond yield plus 250 bps
|
| Price: | C$25.00 per share
|
| Call feature: | June 1, 2019 and on June 1 of every fifth year thereafter
|
| Pricing date: | Nov. 26
|
| Settlement date: | Dec. 5
|
| Ratings: | Moody's: Baa3
|
| Standard & Poor's: BBB
|
| DBRS: Pfd-2
|
| Distribution: | Canada
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