Enbridge's Preferred Shares Conversion and Dividend Reset Explained
Enbridge Announces Conversion Right for Series 11 Preferred Shares
Enbridge Inc. (TSX: ENB), a leader in North American energy delivery, has recently made an important announcement regarding its Cumulative Redeemable Preference Shares, Series 11. Notably, the company has stated that it does not plan to redeem its outstanding Series 11 Shares on March 1, 2025, which opens the door for holders of these shares to convert them into Series 12 Shares, should they choose to do so.
Conversion Details and Deadlines
The conversion right is available for Series 11 shareholders, allowing them to convert their shares on a one-for-one basis into the newly formed Series 12 Shares on March 1, 2025. This decision is influenced by certain conditions; specifically, if there will be fewer than 1,000,000 Series 11 Shares remaining after the conversion date, all remaining shares will be automatically converted into Series 12 Shares. Currently, there are 20 million Series 11 Shares in circulation.
Dividend Rates for Series 11 and Series 12 Shares
For those who decide to maintain their Series 11 Shares after the conversion period, the company will continue to pay quarterly cumulative preferential cash dividends. Beginning March 1, 2025, the annual dividend rate on Series 11 Shares will adjust to 5.477 percent based on the current five-year Government of Canada bond yield.
Conversely, Series 12 Shares issued on the same date will feature a floating dividend rate of 1.41151 percent during the initial three-month period. This rate is calculated based on the annual yield from recent three-month Government of Canada treasury bills, along with an additional fixed amount. The floating dividend rate will be recalibrated each quarter, offering potential opportunities for increased returns.
Guidance for Shareholders
Shareholders wishing to exercise their conversion rights must act within the specified window, which runs from January 30, 2025, to 5:00 p.m. (EST) on February 14, 2025. It is essential for shareholders to reach out to their brokers early during this period to ensure the conversion process is completed smoothly and on time. Notifications received after the final deadline will not be accepted, so timely action is crucial.
About Enbridge Inc.
Enbridge Inc. is at the forefront of connecting communities to energy resources that fuel daily life. Enbridge's initiatives span natural gas, oil, and renewable power networks primarily across North America, with a burgeoning portfolio in offshore wind energy across Europe. With decades of experience in energy management, Enbridge is also investing in advanced technologies including hydrogen and carbon capture to lead the way in transitioning to sustainable energy sources.
The company is headquartered in Calgary and its common shares are traded on both the TSX and NYSE under the symbol ENB. With a commitment to safety and sustainability, Enbridge is poised to maintain its role as a key energy provider while continuously innovating for a more secure energy future.
Frequently Asked Questions
What are the Series 11 Shares of Enbridge?
The Series 11 Shares are Cumulative Redeemable Preference Shares that provide shareholders with fixed dividends and a conversion option to Series 12 Shares.
What happens if I don't convert my Series 11 Shares?
If you choose not to convert your Series 11 Shares, you will continue to receive the dividends associated with those shares.
When can I exercise my conversion right?
The conversion right can be exercised from January 30, 2025, until 5:00 p.m. (EST) on February 14, 2025.
What is the dividend rate for Series 12 Shares?
The Series 12 Shares will start with a floating dividend rate based on recent treasury bills, initially set at 1.41151 percent.
How does Enbridge ensure the sustainability of energy delivery?
Enbridge is investing in modern infrastructure and innovative technologies to enhance energy delivery while prioritizing safety and sustainability.
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