Posted this in dividend increases, but it is worth repeating here. Big drop-down of assets from the mother ship just announced, along with a 12% dividend increase.
Enbridge Income Fund Enters Into $1.76 Billion Transaction With Enbridge Inc. For Natural Gas And Diluent Pipeline Interests
Enbridge Income Fund Holdings Inc. enters into bought deal agreement to sell $337 million of Subscription Receipts to finance its investment in the Fund; 12 percent dividend increase following close of transaction
Enbridge Income Fund Enters Into $1.76 Billion Transaction With Enbridge Inc. for Natural Gas and Diluent Pipeline Interests
CALGARY, ALBERTA--(Marketwired - Sept. 22, 2014) -
Enbridge Income Fund Holdings Inc. (the "Company") (TSX:ENF) and Enbridge Income Fund (the "Fund") announced today that indirect wholly-owned subsidiaries of the Fund have entered into agreements with indirect wholly-owned subsidiaries of Enbridge Inc. (TSX:ENB) (NYSE:ENB) ("Enbridge") to acquire a 50 percent interest in the U.S. segment of the Alliance Pipeline and subscribe for and purchase Class A Units which will provide a defined cash flow stream from the Southern Lights Pipeline (collectively, the "Assets"), for $1.76 billion (the "Transaction"). The Company also announced that to finance its equity investment in the Fund pursuant to the Transaction, it has entered into a bought deal agreement with Scotiabank, RBC Capital Markets and TD Securities Inc. for the sale of an aggregate of 11,100,000 subscription receipts of the Company ("Subscription Receipts") at a price of $30.35 per Subscription Receipt, for gross proceeds of $337 million. Closing of the Transaction is subject to customary regulatory approval, including pursuant to competition legislation in Canada and the U.S. The Company anticipates that the Transaction will be completed in November 2014.
Collectively, the Assets are expected to generate within the Fund cash flow before interest expense of approximately $150 million per year on average over a long term planning horizon. The Company intends to increase the dividend on its common shares ("Common Shares") by 12 percent following close of the Transaction.