Enbridge announces conversion right for holders of series H preferreds

By Wendy Van Sickle

Columbus, Ohio, Aug. 2 – Enbridge Inc. does not intend to exercise its right to redeem its series H cumulative redeemable preference shares on Sept. 1, according to a company news release.

As a result, holders have the right to convert all or part of their series H preference shares on a one-for-one basis into series I cumulative redeemable preference shares on Sept. 1.

If less than 1 million series H preference shares would be outstanding after Sept. 1, then all remaining series H preference shares will automatically be converted into series I preference shares on a one-for-one basis on Sept. 1.

Alternatively, if there would be less than 1 million series I preference shares outstanding after Sept. 1, then no series H preference shares will be converted into series I preference shares.

There are 14 million series H preference shares outstanding.

The new annual dividend rate applicable to the series H preference shares for the five-year period beginning on Sept. 1 will be 6.112%, which is equal to the five-year Government of Canada bond yield of 3.992% plus 212 basis points.

The dividend rate applicable to the series I preference shares for the three-month period beginning on Sept. 1 will be 1.79258%, based on the annual rate on three-month Government of Canada treasury bills for the most recent treasury bills auction of 5.07% plus 212 bps. The rate will be reset every quarter.

The conversion period runs until 5 p.m. ET on Aug. 17.

Enbridge is an energy infrastructure company based in Calgary, Alta.

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