8-K

ENBRIDGE INC 8-K Report (Dec 5, 2012)

Filed December 5, 2012For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. filed a Form 6-K on December 5, 2012, primarily to report on the creation and terms of two new series of preference shares: Series R and Series S. This filing details the rights, privileges, restrictions, and conditions associated with these new share classes, which are designated as Cumulative Redeemable Preference Shares. Investors should note that the Series R Preference Shares are set to initially bear a fixed cumulative preferential cash dividend of $1.00 per share annually, payable quarterly. These shares can be redeemed by Enbridge starting June 1, 2019, at $25.00 per share plus accrued dividends. A key feature is the conversion right for Series R holders into Series S Preference Shares, exercisable on specific dates starting June 1, 2019. The Series S Preference Shares, conversely, will have a floating quarterly dividend rate tied to the T-Bill Rate plus a spread. They can be redeemed after June 1, 2019, with a slightly higher redemption price under certain conditions and can be converted back into Series R Preference Shares starting June 1, 2024. Both series are governed by specific dividend restrictions and are subject to standard redemption and conversion provisions outlined in the filing.

Key Highlights

  • 1Enbridge Inc. has created and defined the terms for two new series of preference shares: Cumulative Redeemable Preference Shares, Series R and Series S.
  • 2The Series R Preference Shares are initially set with a fixed annual dividend of $1.00 per share, payable quarterly, and are redeemable starting June 1, 2019, at $25.00 per share plus accrued dividends.
  • 3Holders of Series R Preference Shares have the right to convert their shares into Series S Preference Shares on specified dates, beginning June 1, 2019.
  • 4The Series S Preference Shares are designed with a floating quarterly dividend rate, calculated based on the T-Bill Rate plus 2.50%.
  • 5Series S Preference Shares can be redeemed starting June 1, 2024, at $25.00 per share plus accrued dividends, with a potential premium for redemptions before specific conversion dates.
  • 6Holders of Series S Preference Shares have the right to convert their shares into Series R Preference Shares, exercisable on specified dates, commencing June 1, 2024.
  • 7Both share series are subject to restrictions on dividend payments and capital reductions for common shares if preferred dividends are not met.

Frequently Asked Questions

The primary purpose of this Form 6-K filing is to report the creation and detailed terms of two new series of preference shares: Cumulative Redeemable Preference Shares, Series R and Series S, including their dividend rights, redemption terms, and conversion features.

During the initial fixed rate period, Series R Preference Shares are entitled to a fixed cumulative preferential cash dividend of $1.00 per share annually, payable quarterly. For subsequent fixed rate periods, the dividend rate will be determined based on the Government of Canada Yield plus 2.50%.

Series R Preference Shares can be redeemed starting June 1, 2019, at $25.00 per share plus accrued dividends. Series S Preference Shares can be redeemed on or after June 1, 2024, at $25.00 per share plus accrued dividends, with a potential $0.50 premium for redemptions between June 1, 2019, and June 1, 2024, that are not on a Series S Conversion Date.

Holders of Series R Preference Shares have the right to convert them into Series S Preference Shares on Series R Conversion Dates (starting June 1, 2019). Conversely, holders of Series S Preference Shares can convert them into Series R Preference Shares on Series S Conversion Dates (starting June 1, 2024).