8-K

ENBRIDGE INC 8-K Report (Jul 16, 2012)

Filed July 16, 2012For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

This Form 6-K filing by Enbridge Inc. reports a Certificate of Amendment related to the issuance of two new series of preference shares: Series N and Series O. These new shares are designated as Cumulative Redeemable Preference Shares and are intended to expand the company's capital structure. The filing details the terms, rights, and conditions associated with each series, including dividend provisions, redemption rights, and conversion features. Investors should note that the creation of these preference shares is a strategic move to enhance Enbridge's financial flexibility. The Series N Preference Shares have a fixed dividend rate for an initial period, convertible to a floating rate, and can be converted into Series O Preference Shares. The Series O Preference Shares have a floating dividend rate and can be converted into Series N Preference Shares. Both series have redemption provisions and are subordinate to other preference shares and senior debt in the event of liquidation. This issuance signifies Enbridge's proactive approach to capital management and its commitment to maintaining a stable financial footing.

Key Highlights

  • 1Enbridge Inc. is issuing two new series of Cumulative Redeemable Preference Shares: Series N and Series O.
  • 2Each series will have an initial issuance of 18,000,000 shares, with a liquidation preference of $25.00 per share.
  • 3Series N Preference Shares will initially pay a fixed cumulative dividend of $1.00 per share annually, transitioning to a floating rate after December 1, 2018.
  • 4Series O Preference Shares will pay a floating quarterly dividend rate, determined by a reference to the T-Bill Rate plus a spread, commencing December 1, 2018.
  • 5Both Series N and Series O Preference Shares have conversion rights between each other on specified dates starting from December 1, 2018 (for Series N to Series O) and December 1, 2023 (for Series O to Series N).
  • 6Redemption of both series is not permitted before December 1, 2018. After this date, the shares are redeemable at $25.00 per share plus accrued dividends.
  • 7The new preference shares rank junior to other existing preference shares and senior debt in liquidation but senior to common shares.

Frequently Asked Questions

The issuance of Series N and Series O Cumulative Redeemable Preference Shares is intended to enhance Enbridge's financial flexibility, diversify its sources of capital, and support its ongoing growth and investment strategies. These shares allow the company to raise capital while managing its capital structure.

Series N Preference Shares will pay a fixed cumulative dividend of $1.00 per share annually during the Initial Fixed Rate Period (until December 1, 2018), after which the dividend rate becomes variable (floating) based on the Government of Canada Yield plus a spread. Series O Preference Shares will pay a floating quarterly dividend rate, tied to the T-Bill Rate plus a spread, commencing December 1, 2018.

Holders of Series N Preference Shares have the right to convert their shares into Series O Preference Shares on December 1, 2018, and every five years thereafter. Conversely, holders of Series O Preference Shares can convert their shares into Series N Preference Shares on December 1, 2023, and every five years thereafter. The conversion ratio is 1:1, subject to certain conditions.

Enbridge cannot redeem the Series N Preference Shares before December 1, 2018. Both Series N and Series O Preference Shares can be redeemed by the company on December 1, 2018 (for Series N), December 1, 2023 (for Series O), and every fifth year thereafter, at a price of $25.00 per share plus any accrued and unpaid dividends. Redemptions on dates other than the specified five-year intervals for Series O have a slightly higher redemption amount.