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WEC - Western Engineered Containment
Copper Tip Energy
Hazloc Heaters

Enbridge Follows TransCanada With Sale of Long-Term Bonds

September 21, 2017

(Bloomberg) Enbridge Inc. sold C$1 billion ($811 million) of 60-year bonds on Thursday, following in the footsteps of fellow Canadian pipeline giant TransCanada Corp.

The Calgary-based pipeline operator priced fixed-to-floating rate subordinated notes due 2077 that could be automatically converted into preference shares in case of bankruptcy. The notes, redeemable after September 2027, pay a coupon of 5.375 percent, according to people familiar with the matter, who are not authorized to speak publicly.

Proceeds from the sale will be used to fund capital projects, reduce short-term debt, and other corporate purposes. The securities have similar maturity and call structure as the C$1.5 billion ($1.22 billion) of 4.65 percent bonds sold by a unit of TransCanada in May. Before that sale, the market for Canadian dollar corporate bonds hasn’t seen an offering of that long a tenor since Enbridge sold C$100 million of 100-year bonds in 2012.

Fitch assigned a BBB- rating to the offering, the agency said in a report Thursday. The ratings reflect the company’s “beneficial size as well as the cash flow stability provided by its low risk businesses,” while concerns include elevated leverage and robust capital spending levels.

The sale is led by BMO Capital Markets, RBC Capital Markets and TD Securities.

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