8-K

ENBRIDGE INC 8-K Report (Jun 6, 2013)

Filed June 6, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed a Form 6-K on June 6, 2013, to report the issuance of two new series of preference shares: Cumulative Redeemable Preference Shares, Series 3, and Cumulative Redeemable Preference Shares, Series 4. This filing details the rights, privileges, restrictions, and conditions associated with these new share series. The issuance of these preference shares is a significant corporate action that may impact Enbridge's capital structure and financial flexibility. Key aspects include the dividend structure, redemption features, and conversion rights between the two series. The Series 3 Preference Shares are initially set with a fixed dividend rate, converting to a floating rate, and have a conversion option into Series 4 Preference Shares. The Series 4 Preference Shares are structured with a floating dividend rate from the outset. Both series have defined redemption dates and prices, as well as provisions for liquidation distributions. Investors should pay close attention to the terms and conditions of these new securities as they will affect the company's financial obligations and shareholder rights.

Key Highlights

  • 1Enbridge Inc. issued two new series of preference shares: Series 3 and Series 4.
  • 2Series 3 Preference Shares are Cumulative Redeemable Preference Shares with an initial fixed dividend rate, converting to a floating rate after September 1, 2019.
  • 3Series 4 Preference Shares are Cumulative Redeemable Preference Shares with a floating dividend rate from issuance.
  • 4Both Series 3 and Series 4 Preference Shares have a face value of $25.00 per share.
  • 5Holders of Series 3 Preference Shares have the right to convert their shares into Series 4 Preference Shares starting September 1, 2019.
  • 6Holders of Series 4 Preference Shares have the right to convert their shares into Series 3 Preference Shares starting September 1, 2024.
  • 7Both series are redeemable by Enbridge Inc. on specific dates, starting from September 1, 2019 for Series 3 and September 1, 2024 for Series 4, at a redemption price of $25.00 plus accrued dividends.

Frequently Asked Questions

This Form 6-K filing serves to officially report the details of Enbridge Inc.'s issuance of two new series of preference shares: Cumulative Redeemable Preference Shares, Series 3, and Cumulative Redeemable Preference Shares, Series 4. It outlines the specific terms, conditions, rights, and obligations associated with these new securities.

The Series 3 Preference Shares initially pay a fixed cumulative preferential cash dividend at an annual rate of $1.00 per share until September 1, 2019. After this date, the dividend rate becomes variable based on the Government of Canada Yield plus 2.38% for subsequent fixed rate periods. The Series 4 Preference Shares pay cumulative preferential cash dividends based on a floating rate determined by the T-Bill Rate plus 2.38% for each quarterly floating rate period.

Yes, holders of Series 3 Preference Shares have the right to convert their shares into Series 4 Preference Shares on September 1, 2019, and every five years thereafter. Conversely, holders of Series 4 Preference Shares can convert them into Series 3 Preference Shares on September 1, 2024, and every five years thereafter, subject to certain conditions regarding minimum outstanding share quantities.

Enbridge Inc. can redeem the Series 3 Preference Shares on September 1, 2019, and every fifth year thereafter, at a price of $25.00 per share plus accrued and unpaid dividends. For Series 4 Preference Shares, redemption can occur on any date after September 1, 2019, not necessarily on a conversion date, at $25.00 per share plus accrued and unpaid dividends. Redemptions specifically on a Series 4 Conversion Date (starting September 1, 2024) have a redemption price of $25.00 per share plus accrued and unpaid dividends, while other redemptions after September 1, 2019, may include an additional $0.50 per share.