Enbridge to Offer Baby Bonds

Enbridge Inc.,  (NASDAQ:ENB) one of the largest pipeline companies in the world, with revenue over $28 billon (U.S. Dollars) will be offering a new $25 Fixed-to-Floating rate subordinated note .  Note that this in NOT Enbridge Energy Partners (NASDAQ:EEP), but is the parent company.

Maturity is way out in 2078 and likely the coupon will be way too meager for the interest rate risk inherent in a 60 year maturity for us to consider.

The issue will have 3 different spread reset rates.  The 1st will be in 2023, the second in 2028 and lastly in 2043.

The preliminary prospectus can be found here.

 

 

 

 

8 thoughts on “Enbridge to Offer Baby Bonds”

  1. This will be Ba2 paper….Not bad…Jerry thought it would be around 6.375%. If there is a generous kicker at the break points I may be a small player. If its miserly, I will pass.

    1. Hi Grid–hate to be fussy but I was hoping for a higher coupon–but Jerry is normally either right or damned close. We shall see how it shakes out.

      1. Just me, I will be interested if it has a nice kicker…I guess Libor plus 6.73% like NSS is, is asking too much… Im sure it wont but it needs to be humping 5% kicker for me to buy. Some stingy 4% or below, no thanks….I want either something that would reward me 5 years for holding, or force them to call.. Those “tweener” resets I am no fan of.

  2. ENB is offering 6.83% now and going up. Yield that is… All pipelines are struggling, even with more “energy independence” and exportation. Makes little sense. And now, the Chinese are threatening tariffs on propane and other items. MLP land is very tough right now when it should be getting better following the crash.

    Oh, yeah, and the FERC announcement regarding taxation is weighing on them even more!

    1. Yes on KTBA – as Gridbird knows, I’ve been hunting that one for a while. Set my buy too low and it got away. If Tim’s thesis re rates is correct, and it appears it almost certainly will be, then I’d suggest we catch it next time around. Any quality issue that approaches mean LT rates I’m OK holding as a perpetual.

    2. Yes, I have owned KTBA since around the latter half of last year. Pretty much a SWAN stock, looks like trading range well defined between $28 and $29.

      They pay every 6 months ( June & Dec ), so expect that there could be a ramp up of price as we go into May.

    3. I tend to buy it at $28 and sell at $29 a few days later when the chances arise. Been a good occassional flipper for me. Its just too boring for me to buy and hold everything, lol..

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