8-K

ENBRIDGE INC 8-K Report (Sep 12, 2012)

Filed September 12, 2012For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

This Form 6-K filing by ENBRIDGE INC. (ENB) on September 12, 2012, relates to the issuance of two new series of preference shares: Series P and Series Q. The company is amending its articles to designate these new classes of shares, which will increase its authorized share capital. Specifically, 16,000,000 Cumulative Redeemable Preference Shares, Series P, and 16,000,000 Cumulative Redeemable Preference Shares, Series Q, are being created. These new preference shares are designed with specific dividend and conversion features. The Series P shares are initially fixed-rate, transitioning to a floating rate tied to Government of Canada yields plus a spread, with redemption and conversion rights starting in March 2019. The Series Q shares are initially floating-rate, tied to T-Bill rates plus a spread, also with redemption and conversion rights beginning in March 2019 and March 2024, respectively. The filing details the terms, dividend payments, redemption provisions, and conversion rights between the two series, along with other standard provisions for preference shares, including tax treatments and book-entry system operations.

Key Highlights

  • 1Enbridge Inc. is issuing two new series of preference shares: Series P and Series Q.
  • 2A total of 16,000,000 shares of Series P and 16,000,000 shares of Series Q are being created.
  • 3Series P Preference Shares will initially pay a fixed cumulative dividend of $1.00 per share annually, payable quarterly.
  • 4Series Q Preference Shares will pay a floating cumulative dividend based on the T-Bill Rate plus 2.50%, payable quarterly.
  • 5Both Series P and Series Q preference shares have redemption rights for the company starting in March 2019.
  • 6Holders of Series P Preference Shares have the right to convert their shares into Series Q Preference Shares starting March 1, 2019.
  • 7Holders of Series Q Preference Shares have the right to convert their shares into Series P Preference Shares starting March 1, 2024.

Frequently Asked Questions

The primary purpose of this filing is to report the amendment of Enbridge Inc.'s articles of incorporation to authorize and designate two new series of preference shares: Series P and Series Q. This action increases the company's authorized share capital to accommodate the issuance of these new shares.

The Series P Preference Shares will initially pay a fixed cumulative dividend of $1.00 per share annually, payable quarterly. The Series Q Preference Shares will pay a floating cumulative dividend, calculated quarterly, based on the T-Bill Rate plus a spread of 2.50%.

For Series P Preference Shares, redemption rights begin on March 1, 2019, and conversion rights (to Series Q) also begin on March 1, 2019. For Series Q Preference Shares, conversion rights (to Series P) begin on March 1, 2024, and redemption rights begin on March 1, 2019.

Yes, the filing states that Enbridge cannot declare or pay dividends on its common shares (or any other junior shares) unless all accrued and unpaid dividends on the Series P and Series Q preference shares (and any other parity shares) have been paid in full.