8-K

ENBRIDGE INC 8-K Report (Sep 26, 2013)

Filed September 26, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed a Form 6-K on September 26, 2013, to report significant corporate actions related to its share structure. The primary purpose of this filing was to announce the creation and terms of two new series of cumulative redeemable preference shares: Series 5 and Series 6. These new share series are designed with specific dividend rights, redemption features, and conversion options, indicating a strategic move to diversify the company's capital structure and potentially manage its financing costs. Investors should note the detailed provisions governing these preference shares, including their fixed and floating dividend rates, redemption terms, and conversion rights into each other. The Series 5 Preference Shares offer a fixed cumulative dividend during the initial period, while Series 6 offers a floating dividend rate. Both series have redemption dates and conversion mechanisms, allowing for potential exchanges between Series 5 and Series 6 under specific conditions. This filing is crucial for understanding the rights and obligations associated with these new securities and their impact on Enbridge's overall financial profile.

Key Highlights

  • 1Enbridge Inc. issued a Form 6-K to detail the creation of two new series of preference shares: Series 5 and Series 6.
  • 2Series 5 Preference Shares are designated as Cumulative Redeemable Preference Shares, initially offering a fixed cumulative dividend of US$1.10 per share annually, payable quarterly.
  • 3Series 6 Preference Shares are also Cumulative Redeemable Preference Shares, offering a floating quarterly dividend rate tied to T-Bill rates plus a spread.
  • 4Both Series 5 and Series 6 Preference Shares have a liquidation preference of US$25.00 per share plus accrued and unpaid dividends.
  • 5Series 5 Preference Shares can be redeemed by Enbridge starting March 1, 2019, at US$25.00 per share plus accrued dividends.
  • 6Series 6 Preference Shares can be redeemed starting after March 1, 2019, with a redemption price of US$25.00 per share plus accrued dividends on or after March 1, 2024, and a slightly higher premium (US$25.50) before that date.
  • 7Holders of Series 5 Preference Shares have the right to convert their shares into Series 6 Preference Shares on specific conversion dates starting March 1, 2019, and vice versa for Series 6 into Series 5 starting March 1, 2024.

Frequently Asked Questions

This filing (specifically a Form 6-K, which is used by foreign private issuers) serves to report the creation and detailed terms of two new series of preference shares: Cumulative Redeemable Preference Shares, Series 5, and Cumulative Redeemable Preference Shares, Series 6. It outlines their dividend rights, redemption features, conversion options, and other associated provisions.

The Series 5 Preference Shares initially pay a fixed cumulative dividend at an annual rate of US$1.10 per share, payable quarterly, and this rate may adjust in subsequent periods. The Series 6 Preference Shares pay a floating quarterly dividend rate, calculated based on the T-Bill Rate plus 2.82%.

Series 5 Preference Shares are not redeemable before March 1, 2019. After this date, they can be redeemed at US$25.00 per share plus accrued and unpaid dividends. Series 6 Preference Shares have a redemption price of US$25.00 per share plus accrued dividends if redeemed on or after March 1, 2024, or US$25.50 per share plus accrued dividends if redeemed between March 1, 2019, and March 1, 2024.

Yes, holders of Series 5 Preference Shares can convert them into Series 6 Preference Shares on Series 5 Conversion Dates (starting March 1, 2019), and holders of Series 6 Preference Shares can convert them into Series 5 Preference Shares on Series 6 Conversion Dates (starting March 1, 2024). The conversion ratio is generally one-for-one, subject to certain conditions and potential adjustments.