8-K

ENBRIDGE INC 8-K Report (Sep 22, 2014)

Filed September 22, 2014For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed a Form 6-K report on September 22, 2014, to announce the issuance of two new series of preference shares: Series 15 and Series 16. These shares are Cumulative Redeemable Preference Shares and are designed to offer a fixed or floating dividend rate depending on the series and the period. The Series 15 shares are initially set to pay a fixed cumulative dividend of $1.10 per share annually, payable quarterly, with a fixed rate period until September 1, 2020. After this date, the dividend rate will be adjusted based on Government of Canada yields plus a spread. The Series 16 shares are designed to pay a floating quarterly dividend rate, based on the T-Bill Rate plus a spread. Both series have a redemption price of $25.00 per share, with specific redemption dates and conditions outlined. Notably, both series have conversion rights: Series 15 can be converted into Series 16 on specific dates starting in 2020, and Series 16 can be converted into Series 15 on specific dates starting in 2025. The filing details the rights and restrictions associated with these new preference share classes, including dividend priorities, liquidation rights, and purchase for cancellation provisions, providing transparency on their terms to investors.

Key Highlights

  • 1Enbridge Inc. issued two new series of preference shares: Cumulative Redeemable Preference Shares, Series 15 and Series 16.
  • 2Series 15 Preference Shares: Initially pay a fixed cumulative dividend of $1.10 annually, with a fixed rate period until September 1, 2020. Post-2020, the dividend rate will be variable based on Government of Canada yields.
  • 3Series 16 Preference Shares: Pay a floating quarterly dividend rate, tied to the T-Bill Rate.
  • 4Both Series 15 and Series 16 have a redemption price of $25.00 per share, with defined redemption dates and notice periods.
  • 5Series 15 has conversion rights into Series 16 starting September 1, 2020, on specific conversion dates.
  • 6Series 16 has conversion rights into Series 15 starting September 1, 2025, on specific conversion dates.
  • 7The filing outlines detailed provisions regarding dividends, redemption, conversion, liquidation rights, and restrictions on further share issuances or payments on junior shares.

Frequently Asked Questions

This 8-K filing (submitted as a Form 6-K for foreign issuers) announces the creation and terms of two new series of preference shares by Enbridge Inc.: Cumulative Redeemable Preference Shares, Series 15 and Series 16. It details their dividend structures, redemption features, conversion rights, and other associated rights and restrictions.

During the initial period until September 1, 2020 (Initial Fixed Rate Period), Series 15 holders are entitled to a fixed cumulative dividend of $1.10 per share annually, paid quarterly. After this date, the dividend rate will be determined by an 'Annual Fixed Dividend Rate,' which is the sum of the Government of Canada Yield for a five-year bond and 2.68%.

Series 16 Preference Shares have a 'Floating Quarterly Dividend Rate.' This rate is calculated as the sum of the T-Bill Rate (average yield on 3-month Government of Canada treasury bills) and 2.68%, applied to a principal amount of $25.00 per share.

Yes, Series 15 Preference Shares have the right to convert into Series 16 Preference Shares on specific dates starting September 1, 2020. Conversely, Series 16 Preference Shares can be converted into Series 15 Preference Shares on specific dates starting September 1, 2025. These conversion rights have specific conditions and limitations.

Both Series 15 and Series 16 have a redemption price of $25.00 per share, plus any accrued and unpaid dividends. Series 15 can be redeemed starting September 1, 2020, on every fifth year thereafter. Series 16 can be redeemed on Series 16 Conversion Dates (starting September 1, 2025) for $25.00 per share, or on other dates after September 1, 2020, for $25.50 per share, plus accrued dividends. Redemption requires a notice period of 30 to 60 days.