Spectra Energy takes in tenders for $267.34 million of 8% notes

By Susanna Moon

Chicago, July 7 – Enbridge Inc. said investors had tendered $267,344,000 of the $500 million of 8% senior notes due 2019 issued by its Spectra Energy Capital, LLC subsidiary.

The amount includes $65,000 principal amount of 8% notes tendered under guaranteed delivery procedures, according to a company notice on Friday.

As announced, the purchase price will be $1,137.28 for each $1,000 principal amount plus accrued interest up to but excluding the expected settlement date of July 7.

Pricing was set at 11 a.m. ET on July 6 using a spread of 25 basis points over the 1% Treasury due Sept. 30, 2019 for a reference yield of 1.457% and a repurchase yield of 1.707%.

The any and all offer ended at 5 p.m. ET on July 6.

Spectra plans to fund the purchase of the 8% notes using proceeds from the issue of Enbridge's 2.9% senior notes due 2022 and its 3.7% senior notes due 2027, expected to close on July 7.

As announced, Spectra began two tender offers on June 27, one to purchase any and all of the 8% notes and the other to buy up to $600 million principal amount of six series of senior notes.

The securities included in the maximum tender offer and the pricing terms are as follows, with the notes listed in descending priority of acceptance:

• $250 million of 7.5% senior notes due 2038 at a purchase price to be set using a spread of 215 bps over the 3% Treasury due Feb. 15, 2047;

• $240 million of 6.75% senior notes due 2032 at a purchase price to be set using a spread of 175 bps over the 3% Treasury due Feb. 15, 2047;

• $150 million of 6.75% senior notes due 2018 at a purchase price to be set using a spread of 35 bps over the 1.25% Treasury due May 31, 2019;

• $500 million of 6.2% senior notes due 2018 at a purchase price to be set using a spread of 40 bps over the 0.75% Treasury due April 15, 2018;

• $300 million of 5.65% senior notes due 2020 at a purchase price to be set using a spread of 65 bps over the 1.5% Treasury due June 15, 2020; and

• $650 million of 3.3% senior notes due 2023 at a purchase price to be set using a spread of 140 bps over the 1.75% Treasury due May 31, 2022.

Prices calculated using the spreads above will include an early tender payment of $30 per $1,000 principal amount that will only be paid to those who tender by 5 p.m. ET on July 11.

Those who tender subsequently will not receive the early tender payment.

The maximum tender ends at 12 a.m. ET on July 26.

All notes tender ahead of the early deadline will be accepted before those tendered afterwards, regardless of priority level.

Pricing will be set at 11 a.m. ET on July 12.

For both offers, Spectra will also pay accrued interest up to but excluding the settlement date, which is expected to be July 7 for the any and all offer, July 13 for early tenders in the maximum offer and July 26 for remaining tenders in the maximum offer.

Completion of the tenders is subject to conditions including the sale at least $1.1 billion of new senior notes by Enbridge.

Enbridge said it does not intend to issue any further public securities from Spectra Capital.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) are dealer managers. D.F. King & Co., Inc. (http://www.dfking.com/spectra, 877 783-5524 or 212 269-5550) is the information agent and depositary.

Enbridge is a Calgary, Alta. energy infrastructure company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.