Enbridge Inc. (TSX: ENB) (NYSE: ENB) announced that it will not exercise its option to redeem the outstanding Cumulative Redeemable Preference Shares, Series 9 (TSX: ENB.PF.A) on December 1, 2024. Consequently, Series 9 shareholders have the option to convert their shares into Cumulative Redeemable Preference Shares, Series 10 on a one-for-one basis on the same date, subject to certain conditions. Shareholders who choose not to convert will keep their Series 9 Shares.
The conversion is conditional: (i) if fewer than 1,000,000 Series 9 Shares would remain outstanding after December 1, 2024, all Series 9 Shares will automatically convert to Series 10 Shares; (ii) if fewer than 1,000,000 Series 10 Shares would be issued, no Series 9 Shares will be converted. Currently, there are 11,000,000 Series 9 Shares outstanding.
Holders of Series 9 Shares that remain after December 1, 2024, will receive quarterly fixed cumulative dividends at a new annual rate of 5.672%, which is calculated as the five-year Government of Canada bond yield of 3.012% plus 2.66%. For Series 10 Shares issued through conversion, holders will receive quarterly floating rate dividends. The initial rate for the period from December 1, 2024, to March 1, 2025, will be 1.55342%, based on the three-month Government of Canada treasury bill yield of 3.64% plus 2.66%. This rate will reset quarterly.
Series 9 shareholders who wish to convert must notify their broker or intermediary between November 1 and November 18, 2024, by 5:00 p.m. (EST). It is advised to act promptly to allow brokers sufficient time to process the conversion request. Late notices will not be accepted.
