By Cristal Cody
Prospect News, May 11 - Enbridge Inc. sold an upsized $400 million of U.S. dollar-denominated cumulative redeemable preference shares that yield a 4% annual dividend for the initial fixed-rate period to Sept. 1, 2017 in the Canadian market on Friday.
The company sold 16 million shares of series L preferred stock (Baa3/BBB/DBRS: Pfd-2) at $25 per share.
The deal was upsized from $200 million, or 8 million shares.
Scotia Capital Inc., RBC Capital Markets Corp. and TD Securities Inc. were the lead managers.
The dividend rate will reset on Sept. 1, 2017 and every five years thereafter at a rate equal to the then five-year U.S. government bond yield plus 315 basis points.
The preferreds are redeemable by Enbridge, at its option, on Sept. 1, 2017 and on Sept. 1 of every fifth year thereafter.
Proceeds will be used to partially fund capital projects, to reduce existing debt and for other general corporate purposes.
Enbridge is a Calgary, Alta.-based oil and gas distributor and transportation company.
Issuer: | Enbridge Inc.
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Amount: | $400 million
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Securities: | Cumulative redeemable preference shares, series L
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Bookrunners: | Scotia Capital Inc., RBC Capital Markets Corp. and TD Securities Inc.
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Price: | $25
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Dividend: | 4% until Sept. 1, 2017, then five-year U.S. government bond yield plus 315 bps
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Call option: | Every five years beginning Sept. 1, 2017
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Pricing date: | May 11
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Settlement date: | May 23
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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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