8-K

ENBRIDGE INC 8-K Report (Dec 12, 2013)

Filed December 12, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

ENBRIDGE INC. (ENB) filed an 8-K report on December 12, 2013, to announce a significant corporate action: the issuance of two new series of preference shares, Series 7 and Series 8. This filing details the terms and conditions associated with these new securities, including their dividend rights, redemption features, and conversion options. These actions are part of Enbridge's ongoing strategy to manage its capital structure and fund its growth initiatives. The Series 7 Preference Shares are designated as Cumulative Redeemable Preference Shares with a fixed dividend rate for an initial period, transitioning to a floating rate thereafter. The Series 8 Preference Shares are structured as Cumulative Redeemable Preference Shares with a floating dividend rate. Both series have provisions for redemption and conversion into each other, offering flexibility to both the company and the shareholders. Investors should note the specific dates for rate adjustments, conversion rights, and redemption options as outlined in the filing.

Key Highlights

  • 1Enbridge Inc. announced the creation and issuance of two new series of preference shares: Series 7 and Series 8.
  • 2The Series 7 Preference Shares are Cumulative Redeemable Preference Shares with an initial fixed dividend rate of $1.10 per share, payable quarterly.
  • 3The Series 8 Preference Shares are Cumulative Redeemable Preference Shares with a dividend rate that floats based on the T-Bill Rate plus a spread.
  • 4Both Series 7 and Series 8 Preference Shares have a liquidation preference of $25.00 per share, plus accrued and unpaid dividends.
  • 5Holders of Series 7 Preference Shares have the right to convert their shares into Series 8 Preference Shares starting March 1, 2019.
  • 6Holders of Series 8 Preference Shares have the right to convert their shares into Series 7 Preference Shares starting March 1, 2024.
  • 7Both series are subject to redemption by Enbridge, with Series 7 redeemable from March 1, 2019, and Series 8 redeemable from March 1, 2024, at $25.00 per share plus accrued dividends.

Frequently Asked Questions

The primary purpose of this 8-K filing is to formally announce and detail the terms and conditions for the creation and issuance of two new series of preference shares: Enbridge Inc. Series 7 Cumulative Redeemable Preference Shares and Series 8 Cumulative Redeemable Preference Shares.

The main difference lies in their dividend structure. Series 7 has an initial fixed dividend rate ($1.10 per share annually) for a set period, followed by a floating rate. Series 8 has a floating dividend rate from the outset, tied to the T-Bill Rate plus a spread. Both have a $25.00 redemption/liquidation value and cumulative dividends.

Holders of Series 7 Preference Shares can convert them to Series 8 starting March 1, 2019. Enbridge can redeem Series 7 shares from March 1, 2019. Holders of Series 8 Preference Shares can convert them to Series 7 starting March 1, 2024. Enbridge can redeem Series 8 shares from March 1, 2019, with a slightly higher redemption price for non-conversion date redemptions.

The filing does not indicate any government guarantee. The dividend rates for both series are linked to Government of Canada yields (for Series 7's subsequent fixed rate) and T-Bill rates (for Series 8's floating rate), but this refers to the benchmark for rate calculation, not a guarantee of payment.