Spectra takes in $761 million of notes in capped tender; pricing set

By Susanna Moon

Chicago, July 12 – Enbridge Inc. gave an early tender update in the capped offer by wholly owned subsidiary Spectra Energy Capital, LLC for six series of its notes as of 5 p.m. ET on July 11, the early tender date.

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 the six other series.

Spectra raised the maximum tender amount to $760,927,000 on Wednesday and accepted for purchase all of the notes tendered by the early deadline, according to a company notice.

Pricing was announced in a subsequent notice on Wednesday as follows, with the early tender breakdown for the maximum offer listed in order of notes priority:

• $137,491,000 of the $250 million 7.5% senior notes due 2038 at a purchase price set at $1,318.47 using a spread of 215 bps over the 3% Treasury due Feb. 15, 2047 for a reference yield of 2.886% and a purchase yield of 5.036%;

• $73,015,000 of the $240 million 6.75% senior notes due 2032 at a purchase price set at $1,222.28 using a spread of 175 bps over the 3% Treasury due Feb. 15, 2047 for a reference yield of 2.886% and a purchase yield of 4.636%;

• $32,323,000 of the $150 million 6.75% senior notes due 2018 at a purchase price set at $1,050.19 using a spread of 35 bps over the 1.25% Treasury due May 31, 2019 for a reference yield of 1.345% and a purchase yield of 1.695%;

• $228,482,000 of the $500 million 6.2% senior notes due 2018 at a purchase price set at $1,034.12 using a spread of 40 bps over the 0.75% Treasury due April 15, 2018 for a reference yield of 1.233% and a purchase yield of 1.633%;

• $137,385,000 of the $300 million 5.65% senior notes due 2020 at a purchase price set at $1,088.82 using a spread of 65 bps over the 1.5% Treasury due June 15, 2020 for a reference yield of 1.511% and a purchase yield of 2.161%; and

• $152,231,000 of the $650 million 3.3% senior notes due 2023 at a purchase price set at $1,002.23 using a spread of 140 bps over the 1.75% Treasury due May 31, 2022 for a reference yield of 1.856% and a purchase yield of 3.256%.

Pricing was set at 11 a.m. ET on July 12 using the bid-side price of the U.S. Treasury reference security.

The total purchase price will include an early tender payment of $30 for each $1,000 principal amount of notes tendered by the early tender deadline.

The maximum tender had been set to continue until 12 a.m. ET on July 26. Because the offer has been fully subscribed as of the early deadline, however, holders who tender notes afterward are not expected to have any of them accepted for purchase.

In the any-and-all offer that ended at 5 p.m. ET on July 6, investors had tendered $267,344,000 of the $500 million of 8% senior notes due 2019 issued by Spectra.

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 bps over the 1% Treasury due Sept. 30, 2019 for a reference yield of 1.457% and a repurchase yield of 1.707%.

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

Spectra plans to fund the offers using proceeds from the issue of Enbridge's 2.9% senior notes due 2022 and its 3.7% senior notes due 2027, which closed July 7.

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. (dfking.com/spectra, 877 783-5524 or 212 269-5550) is the information agent and depositary.

Enbridge is a Calgary, Alta., energy infrastructure company.

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