|
|
|
|
|
|
|
Twelve Month Period Ended
|
|
|
December 31, 2015
|
|
September 30, 2016
|
Earnings coverage
(1)(2)
|
|
1.0 times
|
|
1.7 times
|
Notes:
-
(1)
-
Earnings
coverage on a net earnings basis is equal to earnings attributable to the Corporation plus net interest expense and income taxes divided by net
interest expense plus capitalized interest and preference share dividend obligations.
-
(2)
-
Does
not reflect the issuance of $750,000,000 of Series 17 Preferred Shares, which are expected to be issued on or about
November 23, 2016.
The Corporation evaluates its performance using a variety of measures. Earnings coverage discussed above is not defined under U.S. GAAP
and, therefore, should not be considered in isolation or as an alternative to, or more meaningful than, net earnings as determined in accordance with U.S. GAAP as
an indicator of the Corporation's financial performance or liquidity. This measure is not necessarily comparable to a similarly titled measure of another company.
The
Corporation's dividend requirements on all of its preference shares, adjusted to a before tax equivalent using an effective income tax rate of 1,545% at December 31, 2015 and
13% at September 30, 2016, amounted to approximately negative $20 million for the 12 months ended December 31, 2015 and approximately $333 million for the
12 months ended September 30, 2016. The effective income tax rate of 1,545% at December 31, 2015 was unusually high because of the tax effect of certain permanent items that are
not associated with the current year earnings, relative to the low consolidated earnings. For comparability, if the September 30, 2016 effective income tax rate was used instead of the 2015
effective income tax rate, the Corporation's dividend requirements for the 12 months ended December 31, 2015 would have been approximately $328 million and the earnings coverage
ratio would have been 0.8 times the Corporation's aggregate dividend and pro forma interest requirements for this period. This would result in the Corporation's earnings coverage ratio
for the 12 month period ended December 31, 2015 being less than one-to-one. Additional earnings before interest and income tax for the 12 months ended December 31, 2015 of
$335 million would be required to achieve a one-to-one earnings coverage ratio. The Corporation's pro forma interest requirements for the 12 months ended December 31, 2015
amounted to approximately $1,615 million and for the 12 months ended September 30, 2016 amounted to approximately $1,938 million. The Corporation's earnings before interest
and income tax for the 12 months ended December 31, 2015 were approximately $1,608 million, which is 1.0 times the Corporation's aggregate dividend and pro forma
interest requirements for this period. The Corporation's earnings before interest and income tax for the 12 months ended September 30, 2016 were approximately $3,876 million,
which is 1.7 times the Corporation's aggregate dividend and pro forma interest requirements for this period.
S-12
DESCRIPTION OF THE NOTES
The following description of the terms of the Notes supplements, and to the extent inconsistent therewith supersedes, the description
of the general terms and provisions of debt securities under the heading "Description of Debt Securities" in the accompanying prospectus, and should be read in conjunction with that description. In
this section, the terms "Corporation" and "Enbridge" refer only to Enbridge Inc. and not to its subsidiaries.
The
Notes will be issued under an indenture (as amended and supplemented, the "Indenture"), dated as of February 25, 2005, between the Corporation and Deutsche Bank Trust
Company Americas, as Trustee. The Trustee will initially serve as paying agent for the Notes. The following summary of certain provisions of the Indenture and the Notes does not purport to be complete
and is qualified in its entirety by reference to the actual provisions of the Indenture.
General
The Trustee under the Indenture is referred to in this section as the "Trustee," which term shall include, unless the context otherwise
requires, its successors and assigns. Capitalized terms used but not defined in this section shall have the meanings given to them in the Indenture.
The
Notes will be direct, unsecured and unsubordinated obligations of the Corporation, issued under the Indenture and will rank equally with all other existing and future unsecured and
unsubordinated indebtedness of the Corporation other than preferred claims imposed by statute. In addition, our business operations are conducted substantially through our subsidiaries and through
partnerships and joint ventures. The Notes will be structurally subordinated to all existing and future liabilities of these subsidiaries, partnerships and joint ventures. As of September 30,
2016, the long-term debt (excluding current portion, as well as guarantees and intercompany obligations between the Corporation and its subsidiaries) of the Corporation's subsidiaries totaled
approximately $35,552 million. At September 30, 2016, as determined under U.S. GAAP, the Corporation's total consolidated long-term debt and long-term debt due within one year
was, in aggregate principal amount, approximately $40,375 million (excluding the Notes and the Corporation's proportionate share of non-recourse debt of joint ventures), none of which was
secured debt. There are no terms of the Indenture that limit the ability of the Corporation or its subsidiaries, partnerships or joint ventures to incur additional indebtedness, including in the case
of the Corporation and its subsidiaries, partnerships and joint ventures, indebtedness that ranks, either effectively or by contract, senior to the Notes. See "Description of Debt
Securities Covenants" in the accompanying prospectus.
The
Notes will be denominated in U.S. dollars, and payments of principal of, and premium, if any, and interest on, the Notes will be made in U.S. dollars in the manner and
on terms set out in the Indenture.
The
2026 Notes will be issued as a series of debt securities under the Indenture in an aggregate principal amount of US$750 million. The 2026 Notes will mature on
December 1, 2026 and will bear interest at a rate of 4.250% per year, payable semi-annually in arrears on June 1 and December 1 of each year, commencing June 1, 2017 (each
a "2026 Interest Payment Date"), to the persons in whose names the 2026 Notes are registered at the close of business on the preceding May 15 or November 15, respectively. Interest on
the 2026 Notes will be computed on the basis of a 360-day year of twelve 30-day months.
The
2046 Notes will be issued as a series of debt securities under the Indenture in an aggregate principal amount of US$750 million. The 2046 Notes will mature on
December 1, 2046 and will bear interest at a rate of 5.500% per year, payable semi-annually in arrears on June 1 and December 1 of each year, commencing June 1, 2017 (each
a "2046 Interest Payment Date"), to the persons in whose names the 2046 Notes are registered at the close of business on the preceding May 15 or November 15, respectively. Interest on
the 2046 Notes will be computed on the basis of a 360-day year of twelve 30-day months.
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Interest
payments for the 2026 Notes will include accrued interest from and including the date of issue or from and including the last date in respect of which interest has been paid, as
the case may be, to, but excluding, the 2026 Interest Payment Date, or the date of maturity, as the case may be. Interest payments for the 2046 Notes will include accrued interest from and including
the date of issue or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, the 2046 Interest Payment Date, or the date of maturity, as the
case may be. If any 2026 Interest Payment Date, any 2046 Interest Payment Date, or the applicable maturity date of Notes falls on a day that is not a Business Day, the related payment of principal,
premium, if any, or interest will be postponed to the next succeeding Business Day, and no interest on such payment will accrue for the period from and after such 2026 Payment Date, such 2046 Interest
Payment Date, or the applicable maturity date, as the case may be.
The
Notes may be redeemed by the Corporation prior to maturity as described below under " Optional Redemption."
The
provisions of the Indenture relating to the payment of additional amounts in respect of Canadian withholding taxes in certain circumstances and the provisions of the Indenture
relating to the redemption of the Notes in the event of specified changes in Canadian withholding tax law on or after the date of this prospectus supplement will apply to the Notes. See "Description
of Debt Securities Payment of Additional Amounts" and "Description of Debt
Securities Redemption Tax Redemption" in the accompanying prospectus.
The
Notes will not be entitled to the benefit of any sinking fund. The Notes will not be convertible into other securities of the Corporation in lieu of payment of principal. The Notes
will not be listed on any securities exchange or automated quotation system.
The
Notes will be subject to the provisions of the Indenture relating to Defeasance and Covenant Defeasance as described in the prospectus under the heading "Description of Debt
Securities Defeasance."
Payments
of principal of, and premium, if any, and interest on, the Notes will be made by the Corporation through the Trustee to the Depositary. See "Description of the
Notes Book-Entry System."
"Business
Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York and in the applicable Place of
Payment, if other than The City of New York, are authorized or obligated by law or executive order to close. The initial Places of Payment for the Notes will be the Trustee's corporate trust
office in The City of New York and the Corporation's corporate headquarters in Calgary.
The Trustee
Deutsche Bank Trust Company Americas (the "Trustee") is the Trustee under the Indenture governing the Notes. The Trustee is an
affiliate of Deutsche Bank Securities Inc., an underwriter of the Notes. Under the Trust Indenture Act of 1939, as amended, due to this affiliation, if a default occurred on the Notes, Deutsche
Bank Trust Company Americas would be required to resign as Trustee within 90 days of the default unless the default were cured, duly waived or otherwise eliminated. An affiliate of the Trustee
is a lender under certain of the credit facilities of Enbridge and its subsidiary, Enbridge (U.S.) Inc., described under "Underwriting" in this prospectus supplement, and affiliates of the
Trustee may have further commercial banking, advisory and other relationships with Enbridge and its subsidiaries.
Optional Redemption
The 2026 Notes will be redeemable, in whole or in part, at our option at any time or from time to time. The redemption price for the
2026 Notes to be redeemed on any redemption date that is more than three months prior to the maturity date of the 2026 Notes will be equal to the greater of (i) 100% of the principal amount of
the 2026 Notes to be redeemed and (ii) the sum of the present values of the remaining
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scheduled
payments of principal and interest on the 2026 Notes to be redeemed (assuming that such 2026 Notes matured on September 1, 2026, the date that is three months prior to the maturity
date of the 2026 Notes), not including any portion of the payments of interest accrued as of the date of redemption, discounted to the redemption date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus 30 basis points, plus, in either case, accrued and unpaid interest on the principal amount being
redeemed to the date of redemption. The redemption price for the 2026 Notes to be redeemed on any redemption date
that is on or after the date that is three months prior to the maturity date of the 2026 Notes will be equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid
interest on the principal amount being redeemed to the date of redemption.
The
2046 Notes will be redeemable, in whole or in part, at our option at any time or from time to time. The redemption price for the 2046 Notes to be redeemed on any redemption date that
is more than six months prior to the maturity date of the 2046 Notes will be equal to the greater of (i) 100% of the principal amount of the 2046 Notes to be redeemed and (ii) the sum of
the present values of the remaining scheduled payments of principal and interest on the 2046 Notes to be redeemed (assuming that such 2046 Notes matured on June 1, 2046, the date that is six
months prior to the maturity date of the 2046 Notes), not including any portion of the payments of interest accrued as of the date of redemption, discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus 40 basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to the date of redemption. The redemption price for the 2046 Notes to be redeemed on any redemption date that is on or after the date that is six months prior to
the maturity date of the 2046 Notes will be equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the date
of redemption.
Notwithstanding
the foregoing, installments of interest on Notes being redeemed that are due and payable on interest payment dates falling on or prior to the relevant redemption date
will be payable to the holders of Notes registered at the close of business on the relevant record dates according to the terms and provisions of the Indenture.
Notice
of any redemption will be delivered by first-class mail at least 30 days, but not more than 60 days, before the redemption date to each holder of the Notes to be
redeemed. If less than all the Notes are to be redeemed, the Notes to be redeemed will be selected by the Trustee by lot or such other method that the Trustee deems fair and appropriate.
Unless
we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Notes or portions of the Notes called for redemption.
If
any Note is redeemed in part, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed; provided that no Note in an
aggregate principal amount of $1,000 or less shall be redeemed in part. A replacement Note in the principal amount equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Note.
In
connection with such optional redemption of the Notes, the following defined terms apply:
"Adjusted
Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count
basis) of the Comparable Treasury Issue (as defined below), assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for the redemption date.
"Comparable
Treasury Issue" means the United States Treasury security or securities selected by the Quotation Agent as having an actual or interpolated maturity comparable to the
remaining term of the Notes to be redeemed (assuming that such Notes matured on the date that, with respect to the 2026 Notes,
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is
three months prior to the maturity date of the 2026 Notes, and, with respect to the 2046 Notes, is six months prior to the maturity date of the 2046 Notes) that would be utilized, at the
time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.
"Comparable
Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Quotation
Agent" means one of the Reference Treasury Dealers, which is appointed by the Trustee as directed by us.
"Reference
Treasury Dealer" means each of Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and a Primary Treasury Dealer
(as defined below) selected by MUFG Securities Americas Inc. and their respective successors;
provided
,
however
, that if such entity or its
successor shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), we shall substitute therefor another nationally recognized investment banking firm that is a Primary Treasury Dealer.
"Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Reference Treasury Dealer, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at
3:30 p.m. (New York time) on the third business day preceding such redemption date.
For
greater certainty, the Notes will not be subject to redemption at par value at the option of the Corporation as described in the prospectus under "Description of Debt
Securities Redemption."
The
Notes will be subject to redemption by the Corporation as described in the prospectus under the heading "Description of Debt
Securities Redemption Tax Redemption" in the event of the occurrence of the circumstances therein described after the
date of the initial issuance of the Notes.
Book-Entry System
The Notes will be represented by fully registered global securities (the "Global Securities") registered in the name of
Cede & Co. (the nominee of The Depository Trust Company (the "Depositary")), or such other name as may be requested by an authorized representative of the Depositary. The
authorized denominations of each Note will be US$2,000 and integral multiples of US$1,000 in excess thereof. The provisions set forth under "Description of Debt
Securities Global Securities" in the accompanying prospectus will be applicable to the Notes. Accordingly, Notes may be transferred or exchanged only through
the Depositary and its participants. Except as described under "Description of Debt Securities Global Securities" in the accompanying prospectus, owners of
beneficial interests in the Global Securities will not be entitled to receive Notes in definitive form. Account holders in the Euroclear or Clearstream clearance systems may hold beneficial interests
in the Notes through the accounts that each of these systems maintains as a participant in the Depositary.
Each
person owning a beneficial interest in a Global Security must rely on the procedures of the Depositary and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest in order to exercise any rights of a holder under the Indenture. The laws of some jurisdictions require that certain purchasers of securities take physical
delivery of such securities in certificated form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Security representing the Notes.
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The Depositary
The following is based on information furnished by the Depositary: The Depositary is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the U.S. Securities Exchange Act. The Depositary holds
securities that its participants ("Participants") deposit with the Depositary. The Depositary also facilitates the settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. These
direct Participants ("Direct Participants") include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is
also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to the Depositary and its Participants are on file with the SEC.
Purchases
of the Notes under the Depositary's system must be made by or through Direct Participants, which will receive a credit for such Notes on the Depositary's records. The ownership
interest of each actual purchaser of each Note represented by a Global Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from the Depositary of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participants through which such Beneficial Owner entered into the transaction. Transfers of ownership interests in a Global Security
representing Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners of a Global Security representing the Notes will not
receive Notes in definitive form representing their ownership interests therein, except in the event that use of the book-entry system for such Notes is discontinued.
To
facilitate subsequent transfers, the Global Securities representing the Notes which are deposited with the Depositary are registered in the name of the Depositary's nominee,
Cede & Co., or such other name as may be requested by an authorized representative of the Depositary. The deposit of Global Securities with the Depositary and their registration in the
name of Cede & Co. or such other nominee effect no change in beneficial ownership. The Depositary has no knowledge of the actual Beneficial Owners of the Global Securities representing
the Notes; the Depositary's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance
of notices and other communications by the Depositary to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Neither
the Depositary nor Cede & Co. (nor such other nominee of the Depositary) will consent or vote with respect to the Global Securities representing the Notes.
Under its usual procedures, the Depositary mails an "omnibus proxy" to the Corporation as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the applicable record date (identified in a listing attached to the omnibus proxy).
Principal,
premium, if any, and interest payments on the Global Securities representing the Notes will be made to Cede & Co. (or such other nominee as may be
requested by an authorized representative of the Depositary). The Depositary's practice is to credit Direct Participants' accounts, upon the Depositary's
S-17
receipt
of funds and corresponding detail information from the Corporation or the Trustee, on the applicable payment date in accordance with their respective holdings shown on the Depositary's
records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such Participant and not of the Depositary, the Trustee or the Corporation, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative
of the Depositary) is the responsibility of the Corporation or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
The
Depositary may discontinue providing its services as securities depository with respect to the Notes at any time by giving reasonable notice to the Corporation or the Trustee. Under
such circumstances, in the event that a successor securities depository is not obtained, Notes in definitive form are required to be printed and delivered to each holder.
The
Corporation may decide to discontinue use of the system of book-entry transfers through the Depositary (or a successor securities depository). In that event, Notes in
definitive form will be printed and delivered.
Settlement
for the Notes will be made in immediately available funds. Secondary market trading in the Notes will be settled in immediately available funds.
The
information in this section concerning the Depositary and the Depositary's book-entry system has been obtained from sources that the Corporation believes to be reliable, but is
subject to any changes to the arrangements between the Corporation and the Depositary and any changes to such procedures that may be instituted unilaterally by the Depositary.
Euroclear
Euroclear is incorporated under the laws of Belgium as a bank and is subject to regulation by the Belgian Banking, Finance and
Insurance Commission (La Commission Bancaire, Financière et des Assurances) and the National Bank of Belgium (Banque Nationale de Belgique). Euroclear holds securities for its
customers and facilitates the clearance and settlement of securities transactions among them. It does so through simultaneous electronic book-entry delivery against payment, thereby eliminating the
need for physical movement of certificates. Euroclear provides other services to its customers, including credit, custody, lending and borrowing of securities and tri-party collateral management. It
interfaces with the domestic markets of several countries. Euroclear customers include banks, including central banks, securities brokers and dealers, trust companies and clearing corporations and may
include certain other professional financial intermediaries. Indirect access to the Euroclear system is also available to others that clear through Euroclear customers or that have custodial
relationships with Euroclear customers. All securities in Euroclear are held on a fungible basis. This means that specific certificates are not matched to specific securities clearance accounts.
The
information in this section concerning Euroclear has been obtained from sources that the Corporation believes to be reliable, but is subject to any changes that may be instituted
unilaterally by Euroclear.
Clearstream
Clearstream is a duly licensed bank organized as a société anonyme incorporated under the laws of
Luxembourg and is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier). Clearstream holds securities for its
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customers
and facilitates the clearance and settlement of securities transactions among them. It does so through electronic book-entry transfers between the accounts of its customers. This eliminates
the need for physical movement of securities. Clearstream provides other services to its customers, including safekeeping, administration, clearance and settlement of internationally traded securities
and lending and borrowing of securities. It interfaces with the domestic markets in over 30 countries through established depositary and custodial relationships. Clearstream's customers include
worldwide securities brokers and dealers, banks, trust companies and clearing corporations and may include professional financial intermediaries. Its U.S. customers are limited to securities
brokers and dealers and banks. Indirect access to the Clearstream system is also available to others that clear through Clearstream customers or that have custodial relationships with its customers,
such as banks, brokers, dealers and trust companies.
The
information in this section concerning Clearstream has been obtained from sources that the Corporation believes to be reliable, but is subject to any changes that may be instituted
unilaterally by Clearstream.
Global Clearance and Settlement Procedures
Cross market transfers between persons holding directly or indirectly through the Depositary, on the one hand, and directly or
indirectly through Euroclear or Clearstream, on the other, will be effected through the Depositary in accordance with Depositary rules on behalf of the relevant European international clearing system
by its U.S. depositary; however, such cross market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system
in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its U.S. depositary to take action to effect final settlement on its behalf by delivering or receiving Notes through the Depositary, and making or
receiving payment in accordance with normal procedures for same day funds settlement applicable to the Depositary. Clearstream participants and Euroclear participants may not deliver instructions
directly to their respective U.S. depositaries.
Because
of time zone differences, credits of Notes received through Clearstream or Euroclear as a result of a transaction with a Depositary participant will be made during subsequent
securities settlement processing and dated the business day following the Depositary settlement date. Such credits or any transactions in such Notes settled during that processing will be reported to
the relevant Euroclear participants or Clearstream participants on that following business day. Cash received in Clearstream or Euroclear as a result of sales of Notes by or through a Clearstream
participant or a Euroclear participant to a Depositary participant will be received with value on the Depositary
settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement with the Depositary.
Although
the Depositary, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of Notes among participants of the Depositary, Clearstream and
Euroclear, they are under no obligation to perform or continue to perform those procedures and those procedures may be modified or discontinued at any time. Neither we nor the paying agent will have
any responsibility for the performance by the Depositary, Euroclear or Clearstream or their respective direct or indirect participants of their obligations under the rules and procedures governing
their operations.
S-19
MATERIAL INCOME TAX CONSIDERATIONS
Each of these summaries under this section "Material Income Tax Considerations" is of a general nature only and is not intended to be,
and should not be construed to be, legal or tax advice to any particular holder and no representation is made with respect to the United States federal tax consequences or Canadian tax
consequences to any particular holder. Accordingly, prospective purchasers should consult their own tax advisors with respect to the United States federal tax consequences or Canadian tax
considerations relevant to them, having regard to their particular circumstances.
Material United States Federal Income Tax Considerations
This section describes the material United States federal income tax consequences of owning and disposing of the Notes we are
offering. It applies only to holders who acquire Notes in the offering at the offering price and who hold their Notes as capital assets for United States federal income tax purposes. This
section does not apply to members of a class of holders subject to special rules, such as a dealer in securities, a trader in securities that elects to use a mark-to-market method of accounting, a
bank, a life insurance company, a tax-exempt organization, a person that owns Notes that are a hedge or that are hedged against interest rate risks, a person that
owns Notes as part of a straddle or conversion transaction for United States federal income tax purposes, a person that purchases or sells Notes as part of a wash sale for United States
federal income tax purposes, or a United States holder (as defined below) whose functional currency for tax purposes is not the United States dollar. If Notes are purchased at a
price other than the offering price, the amortizable bond premium or market discount rules may also apply. Holders should consult their own tax advisor regarding this possibility. This section is
based on the Internal Revenue Code of 1986, as amended (the "Code"), its legislative history, existing and proposed regulations under the Code, published rulings and court decisions, all as
currently in effect. These laws are subject to change, possibly on a retroactive basis.
All holders should consult their own tax advisor concerning the consequences of owning these Notes in such holder's particular circumstances under the Code and
the laws of any other taxing jurisdiction.
This
section applies only to United States holders. A United States holder is a beneficial owner of a Note who is a citizen or resident of the United States, a
domestic corporation, an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a United States court can exercise primary supervision
over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust.
If
a partnership (or other entity, organized within or without the United States, treated as a partnership for United States federal income tax purposes) holds
Notes, the tax treatment of a partner as beneficial owner of Notes generally will depend on the status of the partner and the activities of the partnership.
A partner in a partnership holding the Notes should consult its tax advisor with regard to the United States federal income tax treatment of an investment in the Notes.
Payments of Interest
United States holders will be taxed on interest on the Notes as ordinary income at the time the interest is received or when it
accrues, depending on the holder's method of accounting for tax purposes.
Interest
paid by us on the Notes is income from sources outside the United States subject to the rules regarding the foreign tax credit allowable to a United States holder
and will, depending on the United States holder's circumstances, be either "passive" or "general" category income for purposes of computing the foreign tax credit.
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Purchase, Sale and Retirement of the Notes
A United States holder's tax basis in a Note generally will be its cost. A United States holder will generally recognize
capital gain or loss on the sale or retirement of a Note equal to the difference between the amount realized on the sale or retirement, excluding any amounts attributable to accrued but unpaid
interest (which will be treated as interest payments), and such holder's tax basis in the Note. Capital gain of a noncorporate United States holder is generally taxed at preferential rates
where the holder has a holding period greater than one year.
Medicare Tax
A United States holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is
exempt from such tax, is subject to a 3.8% tax on the lesser
of (1) the United States holder's "net investment income" (or "undistributed net investment income" in the case of an estate or trust) for the relevant taxable year and
(2) the excess of the United States holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and
$250,000, depending on the individual's circumstances). A holder's net investment income generally includes its interest income and its net gains from the disposition of Notes, unless such interest
income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a
United States holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of
your investment in the Notes.
Backup Withholding and Information Reporting
For noncorporate United States holders, information reporting requirements, on Internal Revenue Service Form 1099,
generally will apply to payments of principal and interest on a Note within the United States, including payments made by wire transfer from outside the United States to an account
maintained in the United States, and the payment of the proceeds from the sale of a Note effected at a United States office of a broker. Additionally, backup withholding will apply to
such payments if a noncorporate United States holder fails to provide an accurate taxpayer identification number, is notified by the Internal Revenue Service that the holder has failed to
report all interest and dividends required to be shown on the holder's United States federal income tax returns, or in certain circumstances, fails to comply with applicable certification
requirements.
Information with Respect to Foreign Financial Assets
Owners of "specified foreign financial assets" with an aggregate value in excess of $50,000 (and in certain circumstances, a
higher threshold) may be required to file an information report with respect to such assets with their tax returns. "Specified foreign financial assets" may include financial accounts maintained by
foreign financial institutions, as well as the following, but only if they are held for investment and not held in accounts maintained by financial institutions: (i) stocks and securities
issued by non-United States persons, (ii) financial instruments and contracts that have non-United States issuers or counterparties, and (iii) interests in foreign
entities. United States holders that are individuals are urged to consult their tax advisors regarding the application of this reporting requirement to their ownership of the Notes.
Material Canadian Income Tax Considerations
In the opinion of McCarthy Tétrault LLP, our Canadian counsel, the following is, as of the date hereof, a general
summary of the principal Canadian federal income tax considerations under the
Income Tax Act
(Canada) (the "Tax Act") applicable to
a purchaser of Notes pursuant to the prospectus and this prospectus supplement who, at all relevant times, for purposes of the Tax Act and any applicable tax treaty
S-21
(i) is
not resident or deemed to be resident in Canada, (ii) deals with the Corporation at arm's length; (iii) deals at arm's length with any transferee who is resident or deemed
to be resident in Canada and to whom the purchaser assigns or otherwise transfers the Note; (iv) is not a "specified shareholder" (as defined in the Tax Act for purposes of the
thin capitalization rules contained in subsection 18(4) of the Tax Act) of the Corporation or a person that does not deal at arm's length with a specified shareholder of the Corporation
and (v) does not use or hold and is not deemed to use or hold a Note in carrying on business in Canada (a "Non-Resident Holder"). This summary is based on the current provisions of the
Tax Act and the regulations thereunder, proposed amendments to the Tax Act and the regulations thereunder publicly announced prior to the date of this prospectus supplement
(the "Proposed Amendments") and counsel's understanding of the current published administrative practices of the Canada Revenue Agency in effect as of the date hereof. This summary is not
exhaustive of all possible Canadian federal income tax considerations applicable to a Non-Resident Holder and does not anticipate any changes in law or administrative practice, nor does it take into
account provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. There can be no assurance that the Proposed Amendments will be enacted as
proposed or at all. Special rules, which are not discussed below, may apply to a Non-Resident Holder that is an insurer which carries on business in Canada and elsewhere. This summary assumes that no
amount paid or payable as, or on account or in lieu of payment of, interest will be in respect of a debt or other obligation to pay an amount to a person who does not deal at arm's length with the
Corporation for purposes of the Tax Act.
Under
the Tax Act, the payment of interest, principal or premium, if any, to a Non-Resident Holder of a Note by the Corporation will be exempt from Canadian non-resident
withholding tax. No other taxes on income or capital gains will be payable under the Tax Act in respect of the acquisition, holding, redemption or disposition of a Note by a Non-Resident
Holder, or the receipt of interest, principal or premium thereon by a Non-Resident Holder solely as a consequence of such acquisition, holding, redemption or disposition of a Note.
S-22
UNDERWRITING
Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and MUFG Securities
Americas Inc., are acting as representatives of the underwriters named below.
Subject
to the terms and conditions stated in the underwriting agreement dated the date of this prospectus supplement, each underwriter named below has severally agreed to purchase, and
we have agreed to sell to that underwriter, the principal amount of Notes set forth opposite the underwriter's name.
|
|
|
|
|
|
|
|
Underwriter
|
|
Principal Amount
of 2026 Notes
|
|
Principal Amount
of 2046 Notes
|
|
Barclays Capital Inc.
|
|
US$
|
105,000,000
|
|
US$
|
105,000,000
|
|
Deutsche Bank Securities Inc.
|
|
|
105,000,000
|
|
|
105,000,000
|
|
Mizuho Securities USA Inc.
|
|
|
105,000,000
|
|
|
105,000,000
|
|
MUFG Securities Americas Inc.
|
|
|
105,000,000
|
|
|
105,000,000
|
|
BNP Paribas Securities Corp.
|
|
|
75,000,000
|
|
|
75,000,000
|
|
SMBC Nikko Securities America, Inc.
|
|
|
75,000,000
|
|
|
75,000,000
|
|
Credit Agricole Securities (USA) Inc.
|
|
|
45,000,000
|
|
|
45,000,000
|
|
HSBC Securities (USA) Inc.
|
|
|
45,000,000
|
|
|
45,000,000
|
|
Wells Fargo Securities, LLC.
|
|
|
45,000,000
|
|
|
45,000,000
|
|
SG Americas Securities, LLC.
|
|
|
30,000,000
|
|
|
30,000,000
|
|
BB&T Capital Markets, a division of BB&T Securities, LLC.
|
|
|
7,500,000
|
|
|
7,500,000
|
|
Loop Capital Markets LLC.
|
|
|
7,500,000
|
|
|
7,500,000
|
|
Total
|
|
US$
|
750,000,000
|
|
US$
|
750,000,000
|
|
|
|
|
|
|
|
The
underwriting agreement provides that the obligations of the underwriters to purchase the Notes included in this offering are subject to approval of legal matters by counsel and to
other conditions. The underwriters are obligated to purchase all the Notes if they purchase any of the Notes.
In
connection with the offering, each of Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and MUFG Securities Americas Inc.,
on behalf of the underwriters, may purchase and sell Notes in the open market. These transactions may include over-allotment, syndicate covering transactions and stabilizing transactions.
Over-allotment involves syndicate sales of Notes in excess of the principal amount of Notes to be purchased by the underwriters in the offering, which creates a syndicate short position. Syndicate
covering transactions involve purchases of the Notes in the open market after the distribution has been completed in order to cover syndicate short positions. Stabilizing transactions consist of
certain bids or purchases of Notes made for the purpose of preventing or retarding a decline in the market price of the Notes while the offering is in progress.
Any
of these activities may have the effect of preventing or retarding a decline in the market price of the Notes. They may also cause the price of the Notes to be higher than the price
that otherwise would exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the over-the-counter market or otherwise. If the underwriters
commence any of these transactions, they may discontinue them at any time. There will be no obligation on Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities
USA Inc. and MUFG Securities Americas Inc. to engage in such activities.
The
Notes are new issues of securities with no established trading market. The Notes will not be listed on any securities exchange or on any automated dealer quotation system. We have
been advised that the underwriters may make a market in both series of the Notes but are not obligated to do so and may discontinue any market-making activities at any time without notice. No
assurance can be given as to the liquidity of the trading market for the Notes or that an active public market for the Notes will develop. If
S-23
an
active public trading market for the Notes does not develop, the market price and liquidity of the Notes may be adversely affected.
The
following table shows the underwriting commissions that we will pay the underwriters in connection with this offering (expressed as a percentage of the principal amount of
the Notes).
|
|
|
|
|
|
|
Paid by
Enbridge
|
|
Per 2026 Note
|
|
|
0.65000%
|
|
Per 2046 Note
|
|
|
0.87500%
|
|
We
estimate that our total expenses for this offering, excluding underwriting commissions, will be US$300,000.
The
Notes may not be, directly or indirectly, offered, sold or delivered in Canada or to residents of Canada in contravention of the securities laws of any province or territory of
Canada. Each underwriter has agreed that it will not offer, sell or deliver any Notes purchased by it in Canada or to residents of Canada in contravention of the securities laws of any province or
territory of Canada.
The
underwriters or their affiliates perform and have performed commercial banking, investment banking and advisory services for us from time to time for which they receive and have
received customary fees and expenses. The underwriters may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business. In addition, in the
ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related
derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities
and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such
securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Certain
of the underwriters are affiliates of banks that are currently lenders to us (the "Lenders") under credit facilities extended to the Corporation or its subsidiary,
Enbridge (U.S.) Inc. (the "Enbridge Credit Facilities") and as a result under applicable Canadian securities legislation we may be considered to be a connected issuer to such
underwriters. We are in compliance with the terms of the Enbridge Credit Facilities and none of the Lenders were involved in the decision to offer the Notes or in the determination of the terms of the
distribution of the Notes.
We
may have outstanding existing indebtedness owing to certain of the underwriters and affiliates of such underwriters, a portion of which we may repay with the net proceeds of this
offering. See "Use of Proceeds". As a result, one or more of such underwriters or their affiliates may receive more than 5% of the net proceeds from this offering in the form of the repayment of such
existing indebtedness. Accordingly, this offering is being made pursuant to Rule 5121 of the Financial Industry Regulatory Authority, Inc. Pursuant to this rule, the appointment of a
qualified independent underwriter is not necessary in connection with this offering, because the conditions of Rule 5121(a)(1)(C) are satisfied.
If
any of the underwriters or their affiliates has a lending relationship with us or our affiliates, certain of those underwriters or their affiliates routinely hedge, certain other of
those underwriters or their affiliates have hedged and are likely in the future to hedge, and certain other of those underwriters of their affiliates may hedge, their credit exposure to us consistent
with their customary risk management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit
default swaps or the creation of short positions in our affiliates' securities, including potentially the Notes offered hereby. Any such credit default swaps or short positions could adversely affect
future trading prices of the Notes offered hereby.
S-24
A
prospectus supplement in electronic format may be made available on the websites maintained by one or more of the underwriters.
We
have agreed to indemnify the underwriters against certain liabilities, including liabilities under the U.S. Securities Act, or to contribute to payments the underwriters may be
required to make because of any of those liabilities.
We
expect that delivery of the Notes will be made against payment therefor on or about the date specified on the cover page of this prospectus supplement, which will be the fifth
business day following the date of pricing of the Notes (this settlement cycle being referred to as "T+5"). Under Rule 15c6-1 of the U.S. Exchange Act, trades in the secondary market
generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Notes on the date of this prospectus
supplement or the next succeeding business day
will be required, by virtue of the fact that the Notes initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers
of the Notes who wish to make such trades should consult their own advisor.
Notice to Prospective Investors in the European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member
State"), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant
Implementation Date"), it has not made and will not make an offer of the Notes which are the subject of the offering contemplated by this prospectus supplement to the public in that Relevant Member
State, except that it may, with effect from and including the Relevant Implementation Date, make an offer of the Notes to the public in that Relevant
Member State:
-
-
to legal entities which are qualified investors as defined in the Prospectus Directive;
-
-
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive),
as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant underwriter or underwriters nominated by us for any such offer; or
-
-
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of Notes shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus
Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any
Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to
decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus
Directive" means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in each Relevant MemberState. Neither we nor any of the
underwriters have authorized, nor do we or they authorize, the making of any offer
of Notes in circumstances in which an obligation arises for us or any of the underwriters to publish a prospectus for such offer in the European Economic Area.
Each
person in a Relevant Member State who receives any communication in respect of, or who acquires any Notes under, the offers contemplated in this prospectus supplement and the
prospectus will be deemed to have represented, warranted and agreed to and with each underwriter and us that:
-
-
it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e)
of the Prospectus Directive; and
S-25
-
-
in the case of any Notes acquired by it as a financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, (i) the Notes acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant
Member State other than qualified investors; or (ii) where Notes have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those
Notes to it is not treated under the Prospectus Directive as having been made to such persons.
Notice to Prospective Investors in the United Kingdom
This prospectus supplement and the accompanying prospectus are only being distributed to, and are only directed at, persons in the
United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom
it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a "relevant person"). This prospectus supplement and the
accompanying prospectus and their contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the
United Kingdom. Any person
in the United Kingdom that is not a relevant person should not act or rely on this prospectus supplement or any of its contents.
Each
of the underwriters has represented and agreed that (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issuance or sale of the Notes in circumstances in
which Section 21(1) of the FSMA does not apply to us; and (b) it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom.
Notice to Prospective Investors in Hong Kong
The Notes may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32,
Laws of Hong Kong), and no advertisement, invitation or document relating to the Notes may be issued or may be in the possession of any person for the purpose of issue (in each case whether in
Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other
than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance
(Cap.571, Laws of Hong Kong) and any rules made thereunder.
Notice to Prospective Investors in Japan
The Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the "Financial
Instruments and Exchange Law") and each underwriter has agreed that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which
term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in
Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other
applicable laws, regulations and ministerial guidelines of Japan.
S-26
Notice to Prospective Investors in Singapore
This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes may not be circulated or distributed, nor may
the Notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where
the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is
not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the Notes under Section 275 except: (1) to an
institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
LEGAL MATTERS
Certain legal matters relating to Canadian law in connection with this offering of Notes will be passed upon for the Corporation by
McCarthy Tétrault LLP, Calgary, Alberta, Canada, and the validity of the Notes as to matters of New York law will be passed upon for the Corporation by Sullivan &
Cromwell LLP, New York, New York. In addition, certain legal matters relating to United States law in connection with this offering of the Notes will be passed upon for the
underwriters by Paul, Weiss, Rifkind, Wharton & Garrison LLP, Toronto, Ontario, Canada.
As
of November 18, 2016, the partners and associates of McCarthy Tétrault LLP and Sullivan & Cromwell LLP owned beneficially, directly or
indirectly, less than 1% of the outstanding common shares of the Corporation.
EXPERTS
The amended consolidated annual financial statements of the Corporation for the years ended December 31, 2015 and 2014
incorporated by reference in this prospectus supplement have been so incorporated in reliance on the audit report, which is also incorporated by reference in this prospectus supplement, of
PricewaterhouseCoopers LLP, Calgary, Alberta, on the authority of such firm as experts in auditing and accounting.
The
consolidated financial statements and the related financial statement schedule of Spectra Energy, included in the Transaction Circular which is incorporated in this prospectus
supplement by reference, and the effectiveness of Spectra Energy's internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their report. Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
S-27
Base Shelf Prospectus
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim
otherwise.
This short form base shelf prospectus has been filed under legislation in each of the provinces of Canada that permits certain
information about these securities to be determined after this prospectus has become final and that permits the omission from this short form base shelf prospectus of that information. The legislation
requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these
securities.
This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be
lawfully offered for sale and therein only by persons permitted to sell such securities.
Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada.
Copies of the documents incorporated
herein by reference may be obtained on request without charge from the Corporate Secretary of Enbridge Inc., Suite 200,
425 - 1st Street S.W., Calgary, Alberta, T2P 3L8 (telephone (403) 231-3900), and are also available electronically at www.sedar.com.
SHORT FORM BASE SHELF PROSPECTUS
|
|
|
NEW ISSUE
|
|
August 19, 2016
|
ENBRIDGE INC.
US$7,000,000,000
DEBT SECURITIES
COMMON SHARES
PREFERENCE SHARES
We may from time to time offer our debt securities, common shares and cumulative redeemable preference shares (the "
preference
shares
" and, together with our debt securities and common shares, the "
Securities
"), up to an aggregate initial offering price
of US$7,000,000,000 (or its equivalent in Canadian dollars or any other currency or currency unit used to denominate the Securities) during the 25 month period that this short form base
shelf prospectus (the "
Prospectus
"), including any amendments hereto, remains valid.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") NOR HAS THE SEC PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This offering is made by a foreign issuer that is permitted, under a multi-jurisdictional disclosure system adopted by the United States of America
(the "United States"), to prepare this Prospectus in accordance with Canadian disclosure requirements. Prospective investors should be aware that such requirements are different from
those of the United States. The financial statements incorporated herein have been prepared in accordance with accounting principles generally accepted in the United States
("U.S. GAAP"), and are subject to Canadian and United States auditing and auditor independence standards.
Prospective investors should be aware that the acquisition of the Securities may have tax consequences both in the United States and Canada. Such tax
consequences for investors who are resident in, or citizens of, the United States may not be described fully herein or in any applicable Prospectus Supplement (as defined herein). You
should read the tax discussion under "Certain Income Tax Considerations" herein and in any applicable Prospectus Supplement.
The enforcement by investors of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Corporation is
incorporated under the laws of Canada, that most of its officers and directors are residents of Canada, that some of the experts named in this Prospectus are residents of Canada, and that all or a
substantial portion of the assets of the Corporation and said persons are located outside the United States.
The
specific variable terms of any offering of Securities will be set forth in a shelf prospectus supplement (a "
Prospectus
Supplement
") including, where applicable: (i) in the case of common shares or preference shares, the number of shares offered and the offering price; and (ii) in
the case of debt securities, the designation, any limit on the aggregate principal amount, the currency or currency unit, the maturity, the offering price, whether payment on the debt securities will
be senior or subordinated to our other liabilities and obligations, whether the debt securities will bear interest, the interest rate or method of determining the interest
rate,
any terms of redemption, any conversion or exchange rights and any other specific terms of the debt securities. You should read this Prospectus and any applicable Prospectus Supplement before
you invest in any Securities.
This
Prospectus does not qualify for issuance debt securities in respect of which the payment of principal and/or interest may be determined, in whole or in part, by reference to one or
more underlying interests including, for example, an equity or debt security, a statistical measure of economic or financial performance including, but not limited to, any currency, consumer price or
mortgage index, or the price or value of one or more commodities, indices or other items, or any other item or formula, or any combination or basket of the foregoing items, other than as required to
provide for an interest rate that is adjusted for inflation. For greater certainty, this Prospectus may qualify for issuance debt securities in respect of which the payment of principal and/or
interest may be determined, in whole or in part, by reference to published rates of a central banking authority or one or more financial institutions, such as a prime rate or a bankers' acceptance
rate, or to recognized market benchmark interest rates such as LIBOR, EURIBOR or a United States federal funds rate.
The
Corporation's common shares (the "
Common Shares
") are listed on the New York Stock Exchange and the Toronto Stock
Exchange (the "TSX") under the symbol "ENB". The Corporation's cumulative redeemable preference shares, series A are listed on the TSX under the symbol "ENB.PR.A", the Corporation's
cumulative redeemable preference shares, series B are listed on the TSX under the symbol "ENB.PR.B", the Corporation's cumulative redeemable preference shares, series D are listed on the
TSX under the symbol "ENB.PR.D", the Corporation's cumulative redeemable preference shares, series F are listed on the TSX under the symbol "ENB.PR.F", the Corporation's cumulative redeemable
preference shares, series H are listed on the TSX under the symbol "ENB.PR.H", the Corporation's cumulative redeemable preference shares, series J are listed on the TSX under the symbol
"ENB.PR.U", the Corporation's cumulative redeemable preference shares, series L are listed on the TSX under the symbol "ENB.PF.U", the Corporation's cumulative redeemable preference shares,
series N are listed on the TSX under the symbol "ENB.PR.N", the Corporation's cumulative redeemable preference shares, series P are listed on the TSX under the symbol "ENB.PR.P", the
Corporation's cumulative redeemable preference shares, series R are listed on the TSX under the symbol "ENB.PR.T", the Corporation's cumulative redeemable preference shares, series 1 are
listed on the TSX under the symbol "ENB.PR.V", the Corporation's cumulative redeemable preference shares, series 3 are listed on the TSX under the symbol
"ENB.PR.Y", the Corporation's cumulative redeemable preference shares, series 5 are listed on the TSX under the symbol "ENB.PF.V", the Corporation's cumulative redeemable preference shares,
series 7 are listed on the TSX under the symbol "ENB.PR.J", the Corporation's cumulative redeemable preference shares, series 9 are listed on the TSX under the symbol "ENB.PF.A", the
Corporation's cumulative redeemable preference shares, series 11 are listed on the TSX under the symbol "ENB.PF.C", the Corporation's cumulative redeemable preference shares, series 13
are listed on the TSX under the symbol "ENB.PF.E" and the Corporation's cumulative redeemable preference shares, series 15 are listed on the TSX under the symbol "ENB.PF.G."
There is currently no market through which the
debt securities or preference shares may be sold and purchasers may not be able to resell such securities issued under this
Prospectus. This may affect the pricing of those securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer
regulation. See "Risk Factors".
The
Corporation may sell the Securities to or through underwriters or dealers purchasing as principals, directly to one or more purchasers pursuant to applicable statutory exemptions or
through agents. See "Plan of Distribution". The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent engaged in connection with the
offering and sale of the Securities, and will set forth the terms of the offering of such Securities, including the method of distribution, the proceeds to the Corporation and any fees, discounts or
any other compensation payable to underwriters, dealers or agents and any other material terms of offering of such Securities.
In
connection with any offering of Securities, the underwriters, agents or dealers may over-allot or effect transactions which stabilize or maintain the market price of the Securities at
levels above those which might otherwise prevail in the open market. See "Plan of Distribution".
The
head and registered office of the Corporation is located at Suite 200, 425 - 1st Street S.W., Calgary, Alberta, T2P 3L8.
TABLE OF CONTENTS
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Page
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Table of Contents
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1
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About this Prospectus
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1
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Documents Incorporated by Reference
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2
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Certain Available Information
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3
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Special Note Regarding Forward-Looking Statements
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4
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The Corporation
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5
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Use of Proceeds
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5
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Earnings Coverage Ratio
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5
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Description of Debt Securities
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6
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Description of Share Capital
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20
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Certain Income Tax Considerations
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21
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Plan of Distribution
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22
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Risk Factors
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22
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Legal Matters
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22
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Experts
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22
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Documents Filed as Part of the Registration Statement
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23
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Enforcement of Civil Liabilities
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23
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ABOUT THIS PROSPECTUS
In this Prospectus and in any Prospectus Supplement, unless otherwise specified or the context otherwise requires, all dollar amounts
are expressed in Canadian dollars or Cdn$. "U.S. dollars" or "US$" means lawful currency of the United States. Unless otherwise indicated, all financial information included in this
Prospectus or included in any Prospectus Supplement is determined using U.S. GAAP. Except as set forth under "Description of Debt Securities" and "Description of Share Capital", and unless the
context otherwise requires, all references in this Prospectus and any Prospectus Supplement to "
Enbridge
", the
"
Corporation
", "
we
", "
us
" and
"
our
" mean Enbridge Inc. and its subsidiaries, partnership interests and joint venture investments.
This
Prospectus provides a general description of the Securities that we may offer. Each time we sell Securities under this Prospectus, we will provide you with a Prospectus Supplement
that will contain specific information about the terms of that offering. The Prospectus Supplement may also add, update or change information contained in this Prospectus. Before investing in any
Securities, you should read both this Prospectus and any applicable Prospectus Supplement together with additional information described below under "Documents Incorporated by Reference" and "Certain
Available Information".
We
take responsibility only for the information contained in or incorporated by reference in this Prospectus or any applicable Prospectus Supplement and for the other information
included in the registration statement of which this Prospectus forms a part. We have not authorized anyone to provide you with different or additional information. We are not making an offer
of the Securities in any jurisdiction where the offer is not permitted by law. You should bear in mind that although the information contained in, or incorporated by reference in, this Prospectus is
intended to be accurate as of the date on the front of such documents, such information may also be amended, supplemented or updated by the subsequent filing of additional documents deemed by law to
be or otherwise incorporated by reference into this Prospectus and by any subsequently filed prospectus amendments.
1
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Corporation with the securities commission or similar regulatory authority in each of the
provinces of Canada and with the SEC, are specifically incorporated by reference in, and form an integral part of, this Prospectus, except as otherwise
provided below:
-
(a)
-
amended
consolidated comparative financial statements of the Corporation for the years ended December 31, 2015 and 2014 and the auditors'
report thereon;
-
(b)
-
amended
management's discussion and analysis of financial condition and results of operations for the year ended December 31, 2015;
-
(c)
-
unaudited
interim comparative consolidated financial statements of the Corporation for the three and six months ended June 30, 2016;
-
(d)
-
management's
discussion and analysis of financial condition and results of operations for the three and six months ended June 30, 2016;
-
(e)
-
management
information circular of the Corporation dated March 8, 2016 relating to the annual meeting of shareholders held on May 12,
2016; and
-
(f)
-
annual
information form of the Corporation dated February 19, 2016 for the year ended December 31, 2015
(the "
AIF
").
Any
documents of the type referred to above, any unaudited interim consolidated financial statements and related management's discussion and analysis, any material change reports (except confidential
material change reports), business acquisition reports and any exhibits to unaudited interim consolidated financial statements which contain updated earnings coverage calculations filed by the
Corporation with the various securities commissions or similar authorities in Canada after the date of this Prospectus and prior to the expiry of the term of this Prospectus shall be deemed to be
incorporated by reference into this Prospectus. These documents are available through the internet on the System for Electronic Document Analysis and Retrieval
("
SEDAR
") which can be accessed at www.sedar.com. In addition, any similar documents filed on Form 6-K or Form 40-F by the Corporation
with the SEC after the date of this Prospectus shall be deemed to be incorporated by reference into this Prospectus and the registration statement of which this Prospectus forms a part, in the
case of Form 6-K reports if and to the extent expressly provided in such report. The Corporation's reports on Form 6-K and its annual report on Form 40-F are available on
the SEC's website at www.sec.gov.
Upon a new annual information form and the related annual consolidated financial statements and management's discussion and analysis being filed by the
Corporation with and, where required, accepted by
the applicable securities regulatory authorities during the term of this Prospectus, any previous annual information form, any previous annual consolidated financial statements, all unaudited interim
consolidated financial statements and accompanying management's discussion and analysis, any material change reports and any business acquisition reports filed by the Corporation prior to the
commencement of the financial year of the Corporation in respect of which the new annual information form is filed shall be deemed no longer to be incorporated into this Prospectus for purposes of
future offers and sales of Securities hereunder. Upon unaudited interim consolidated financial statements and the accompanying management's discussion and analysis being filed by the Corporation with
the applicable securities regulatory authorities during the term of this Prospectus, all unaudited interim consolidated financial statements and the accompanying management's discussion and analysis
filed prior to the new unaudited interim consolidated financial statements shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities
hereunder, and upon a new management information circular relating to an annual meeting of shareholders of the Corporation being filed by the Corporation with the applicable securities regulatory
authorities during the term of this Prospectus, any management information circular for a previous annual meeting of shareholders shall be deemed no longer to be incorporated by reference into this
Prospectus for purposes of future offers and sales of Securities hereunder.
Any "template version" of any "marketing materials" (as such terms are defined in National
Instrument 41-101
General Prospectus Requirements
) filed by the Corporation after the date of a pricing
2
supplement or other prospectus supplement and before the termination of the distribution of Securities offered pursuant to such pricing supplement or other prospectus supplement (together with this
Prospectus) will be deemed to be incorporated by reference into such pricing supplement or other prospectus supplement for the purposes of the distribution of Securities to which the pricing
supplement or other prospectus supplement pertains.
Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the
document that it modifies or supersedes. The making of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made,
constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in
light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this
Prospectus.
A
Prospectus Supplement containing the specific terms of an offering of Securities will be filed together with this Prospectus and will be deemed to be incorporated by reference into
this Prospectus as of the date of such supplement solely for the purposes of the offering of the Securities offered thereunder.
Updated
earnings coverage ratios will be filed quarterly with the applicable securities regulatory authorities, either as exhibits to the Corporation's unaudited interim and audited
annual consolidated financial statements or as Prospectus Supplements and will be deemed to be incorporated by reference into this Prospectus for the purposes of the offering of the Securities.
Copies
of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of Enbridge, Suite 200,
425 - 1st Street S.W., Calgary, Alberta, T2P 3L8 (telephone (403) 231-3900).
CERTAIN AVAILABLE INFORMATION
The Corporation has filed with the SEC under the
United States Securities Act of
1933
, as amended (the "
U.S. Securities Act
"), a registration statement on Form F-10 relating to the
Securities and of which this Prospectus forms a part. This Prospectus does not contain all of the information set forth in such registration statement, certain items of which are contained in
the exhibits to the registration statement as permitted or required by the rules and regulations of the SEC. See "Documents Filed as Part of the Registration Statement". Statements made in this
Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete, and in each instance, reference is made to the exhibit, if applicable, for a more
complete description of the relevant matter, each such statement being qualified in its entirety by such reference. Items of information omitted from this Prospectus but contained in the registration
statement will be available on the SEC's website at www.sec.gov.
The
Corporation is subject to the information requirements of the
United States Securities Exchange Act of 1934
, as amended
(the "
U.S. Exchange Act
"), and in accordance therewith files reports and other information with the SEC. Under the multi-jurisdictional
disclosure system adopted by the United States and Canada, such reports and other information may be prepared in accordance with the disclosure requirements of Canada, which requirements are
different from those of the United States. The Corporation is exempt from the rules under the U.S. Exchange Act prescribing the furnishing and content of proxy statements, and its
officers, directors and principal shareholders are exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the U.S. Exchange Act. Under the
U.S. Exchange Act, the Corporation is not required to publish financial statements as promptly as United States companies. Such reports and other information will be available on the
SEC's website at www.sec.gov.
Prospective
investors may read and copy any document the Corporation has filed with the SEC at the SEC's public reference room in Washington D.C. and may also obtain copies of
those documents from the public
3
reference
room of the SEC at 100 F Street, N.E., Washington, D.C. 20549 by paying a fee. Additionally, prospective investors may read and download some of the documents the
Corporation has filed with the SEC's Electronic Data Gathering and Retrieval system at www.sec.gov. Reports and other information about the Corporation may also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including documents incorporated by reference into this Prospectus, contain both historical and forward-looking
statements within the meaning of Section 27A of the U.S. Securities Act and Section 21E of the U.S. Exchange Act. This information has been included to provide readers with
information about the Corporation and its subsidiaries, including management's assessment of Enbridge's and its subsidiaries' future plans and operations. This information may not be appropriate for
other purposes. Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and
similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this Prospectus include, but are not
limited to, statements with respect to the following: expected earnings before interest and taxes ("
EBIT
") or expected adjusted EBIT; expected
earnings/(loss) or adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected available cash flow from operations
("
ACFFO
"); expected future cash flows; expected costs related to projects under construction; expected in-service dates for projects under construction;
expected capital expenditures; expected equity funding requirements for the Corporation's commercially secured growth program; estimated future dividends; expected future actions of regulators;
expected costs related to leak remediation and potential insurance recoveries; expectations regarding commodity prices; supply forecasts; expectations regarding the impact of the dividend payout
policy and dividend payout expectation; and strategic alternatives currently being evaluated in connection with the United States sponsored vehicles strategy.
Although
Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the
information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve
a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or
implied by such statements. Material assumptions include assumptions about the following: the expected supply of and demand for crude oil, natural gas, natural gas liquids
("
NGL
") and renewable energy; prices of crude oil, natural gas, NGL and renewable energy; exchange rates; inflation; interest rates; availability and
price of labour and construction materials; operational reliability; customer and regulatory approvals; maintenance of support and regulatory approvals for the Corporation's projects; anticipated
in-service dates; weather; impact of the dividend policy on the Corporation's future cash flows; credit ratings; capital project funding; expected EBIT or expected adjusted EBIT; expected
earnings/(loss) or adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected future cash flows and expected future ACFFO; and estimated future dividends.
Assumptions
regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all
forward-looking statements. These factors are relevant to all forward-looking statements as they may impact current and future levels of demand for the Corporation's services. Similarly, exchange
rates, inflation and interest rates impact the economies and business environments in which the Corporation operates and may impact levels of demand for the Corporation's services and cost of inputs,
and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking
statement cannot be determined with certainty, particularly with respect to expected EBIT, adjusted EBIT, earnings/(loss), adjusted earnings/(loss) and associated per share amounts, ACFFO or estimated
future dividends. The most relevant assumptions associated with forward-looking statements on projects under construction, including estimated completion dates and expected capital expenditures,
include the following: the availability and price of labour and construction materials; the effects of inflation and foreign exchange rates on
4
labour
and material costs; the effects of interest rates on borrowing costs; the impact of weather; and customer and regulatory approvals on construction and in-service schedules.
Enbridge's
forward-looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, dividend policy, project approval and support,
weather, economic and competitive conditions, public opinion, changes in tax law and tax rate increases, exchange rates, interest rates, impact of commodity prices and supply of and demand for
commodities, including but not limited to those risks and uncertainties discussed in this Prospectus and in documents incorporated by reference into this Prospectus. The impact of any one risk,
uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge's future course of action depends on management's assessment
of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in
this Prospectus or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or
persons acting on the Corporation's behalf, are expressly qualified in their entirety by these cautionary statements.
THE CORPORATION
Enbridge is a North American leader in delivering energy. As a transporter of energy, Enbridge operates, in Canada and the
United States, the world's longest crude oil and liquids transportation system. The Corporation also has significant and growing involvement in natural gas gathering, transmission and midstream
businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company and provides distribution services in Ontario, Quebec, New Brunswick and
New York State. As a generator of energy, Enbridge has interests in nearly 2,000 MW of net renewable and alternative energy generating capacity which is operating, secured or under
construction,
and the Corporation continues to expand its interests in wind, solar and geothermal power. Enbridge employs nearly 11,000 people, primarily in Canada and the United States.
The
Corporation was incorporated on April 13, 1970 under the
Companies Act
of the Northwest Territories and was continued under the
Canada Business Corporations
Act
on December 15, 1987. The registered office and principal place of business of the Corporation are at
Suite 200, 425 1st Street S.W., Calgary, Alberta, T2P 3L8.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net proceeds from the sale of the Securities will be added to the general
funds of the Corporation to be used for general corporate purposes, which may include reducing outstanding indebtedness and financing capital expenditures, investments and working capital requirements
of the Corporation. Specific information about the use of proceeds from the sale of any Securities will be set forth in a Prospectus Supplement. The Corporation may invest funds that it does not
immediately require in short-term marketable debt securities. The Corporation expects that it may, from time to time, issue securities other than pursuant to this Prospectus.
The
net proceeds to be received by the Corporation from the sale of the Securities from time to time under this Prospectus are not expected to be applied to fund any specific project.
The Corporation's overall corporate strategy and major initiatives supporting its strategy are summarized in the Corporation's management's discussion and analysis for the year ended
December 31, 2015, as modified or superseded by information contained in the Corporation's management's discussion and analysis for the three and six months ended June 30, 2016, and any
subsequent periods, incorporated herein by reference.
EARNINGS COVERAGE RATIO
The following earnings coverage ratios have been calculated on a consolidated basis for the respective 12 month periods ended
December 31, 2015 and June 30, 2016 and are derived from audited financial information in the case of December 31, 2015 and unaudited financial information in the case of
June 30, 2016, in each case prepared in accordance with U.S. GAAP. The following ratios give pro forma effect to the issuance by the Corporation from time to time of preference
shares and debt securities since December 31, 2015 in the case of the December 31, 2015 earnings coverage ratio, including the issuance by Enbridge Gas Distribution Inc.
5
("
EGD
") of $300,000,000 principal amount of 2.50% unsecured medium terms notes (the "
2.50%
Notes
") pursuant to a first pricing supplement dated August 2, 2016, and the issuance by Enbridge Pipelines Inc.
("
EPI
") of $400,000,000 principal amount of 3.00% unsecured medium terms notes (the "
3.00%
Notes
") pursuant to a first pricing supplement dated August 4, 2016 and $400,000,000 principal amount of 4.13% unsecured medium terms notes
(the "
4.13% Notes
") pursuant to a second pricing supplement dated August 4, 2016 and since June 30, 2016 in the case of the
June 30, 2016 earnings coverage ratio, including the issuance by EGD of the 2.50% Notes pursuant to pricing supplement dated August 2, 2016 and the issuance by EPI. of the 3.00% Notes
pursuant to a first pricing supplement dated August 4, 2016 and the 4.13% Notes pursuant to a second pricing supplement dated August 4, 2016. Adjustments for other normal course
issuances and repayments of long-term debt subsequent to December 31, 2015 and June 30, 2016 would not materially affect the ratio and, as a result, have not been made. The earnings
coverage ratios set forth below do not purport to give effect to the issue of any securities pursuant to this Prospectus and do not purport to be indicative of earnings coverage ratios for any
future periods.
|
|
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Twelve Month Period Ended
|
|
|
December 31, 2015
|
|
June 30, 2016
|
Earnings coverage
(1)
|
|
1.0 times
|
|
1.6 times
|
The
Corporation evaluates its performance using a variety of measures. Earnings coverage discussed above is not defined under U.S. GAAP and, therefore, should not be considered in
isolation or as an alternative to, or more meaningful than, net earnings as determined in accordance with U.S. GAAP as an indicator of the Corporation's financial performance or liquidity. This
measure is not necessarily comparable to a similarly titled measure of another company.
The
Corporation's pro forma dividend requirements on all of its preference shares adjusted to a before tax equivalent using an effective income tax rate of 1,545%
(2)
at December 31, 2015 and 33% at June 30, 2016 amounted to approximately negative $20 million for the 12 months ended December 31, 2015 and approximately
$432 million for the 12 months ended June 30, 2016. The Corporation's pro forma interest requirements for the 12 months ended December 31, 2015 amounted to
approximately $1,576 million and for the 12 months ended June 30, 2016 amounted to approximately $1,790 million. The Corporation's earnings before interest and income tax
for the 12 months ended December 31, 2015 were approximately $1,608 million, which is 1.0 times the Corporation's aggregate pro forma dividend and interest
requirements for this period. The Corporation's earnings before interest and income tax for the 12 months ended June 30, 2016 were approximately $3,646 million, which is
1.6 times the Corporation's aggregate pro forma dividend and interest requirements for this period.
Notes:
-
(1)
-
Earnings
coverage on a net earnings basis is equal to earnings attributable to the Corporation plus net interest expense and income taxes divided by net
interest expense plus capitalized interest and preference share dividend obligations.
-
(2)
-
The
effective income tax rate of 1,545% at December 31, 2015 was unusually high because of the tax effect of certain permanent items that are not
associated with the current year earnings, relative to the low consolidated earnings. For comparability, if the 2014 effective income tax rate was used instead of the 2015 effective income tax rate,
the Corporation's dividend requirements for the 12 months ended December 31, 2015 would have been approximately $398 million and the earnings coverage ratio would have been
0.8 times the Company's aggregate dividend and interest requirements for this period. This would result in the Corporation's earnings coverage ratio for the 12 month period ended
December 31, 2015 being less than one-to-one. Additional earnings before interest and income tax for the 12 months ended December 31, 2015 of $366 million would be required
to achieve a one-to-one earnings coverage ratio.
DESCRIPTION OF DEBT SECURITIES
In this section, the terms "
Corporation
" and
"
Enbridge
" refer only to Enbridge Inc. and not to its subsidiaries. The following description sets forth certain general terms and provisions of
the debt securities. The Corporation will provide particular terms and provisions of a series of debt securities and a description of how the general terms and provisions described below may apply to
that series in a Prospectus Supplement. Prospective investors should rely on information in the applicable Prospectus Supplement if it is different from the following information.
6
The
debt securities will be issued under an indenture dated February 25, 2005, as amended and supplemented by the First Supplemental Indenture, dated March 1, 2012, each
between Enbridge and Deutsche Bank Trust Company Americas, as trustee (the "
Trustee
") (the indenture as amended and supplemented, the
"
Indenture
"). The Indenture is subject to and governed by the
U.S. Trust Indenture Act of 1939
,
as amended. A form of the Indenture has been filed as an exhibit to the registration statement of which this Prospectus is a part and is available as described above under "Certain Available
Information". The following is a summary of the Indenture. For further details, prospective investors should refer to the Indenture.
The
Corporation may issue debt securities and incur additional indebtedness other than through the offering of debt securities pursuant to this Prospectus.
General
The Indenture does not limit the aggregate principal amount of debt securities which may be issued under the Indenture. It provides
that debt securities will be in registered form, may be issued from time to time in one or more series and may be denominated and payable in U.S. dollars or any
other currency. Material Canadian and United States federal income tax considerations applicable to any debt securities, and special tax considerations applicable to the debt securities
denominated in a currency or currency unit other than Canadian or U.S. dollars, will be described in the Prospectus Supplement relating to the offering of debt securities.
The
Prospectus Supplement will set forth the following terms relating to the debt securities being offered:
-
-
the title of the debt securities of the series;
-
-
any limit upon the aggregate principal amount of the debt securities of the series;
-
-
the party to whom any interest on a debt security of the series shall be payable;
-
-
the date or dates on which the principal of (and premium, if any, on) any debt securities of the series
is payable;
-
-
the rate or rates at which the debt securities will bear interest, if any, the date or dates from which any interest will
accrue, the interest payment dates on which interest will be payable and the regular record date for interest payable on any interest payment date;
-
-
the place or places where principal and any premium and interest are payable;
-
-
the period or periods if any within which, the price or prices at which, the currency or currency units in which and the
terms and conditions upon which any debt securities of the series may be redeemed, in whole or in part, at the option of the Corporation;
-
-
the obligation, if any, of the Corporation to redeem or purchase any debt securities of the series pursuant to any sinking
fund or analogous provisions or at the option of the Holder thereof and the terms and conditions upon which debt securities of the series may be redeemed or purchased, in whole or in part pursuant to
such obligation;
-
-
if other than denominations of $1,000 and any integral multiples of $1,000, the denominations in which the debt securities
are issuable;
-
-
if the amount of principal of or any premium or interest on any debt securities of the series may be determined with
reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;
-
-
if other than U.S. dollars, the currency, currencies or currency units in which the principal of or any premium or
interest on any debt securities of the series will be payable, and any related terms;
-
-
if the principal of or any premium or interest on any debt securities of the series is to be payable, at the election of
the Corporation or the holders, in one or more currencies or currency units other than that or those in which the debt securities are stated to be payable, specific information relating to the
currency, currencies or currency units, and the terms and conditions relating to any such election;
7
-
-
if other than the entire principal amount, the portion of the principal amount of any debt securities of the series that
is payable upon acceleration of maturity;
-
-
if the principal amount payable at maturity of the debt securities of the series is not determinable prior to maturity,
the amount that is deemed to be the principal amount prior to maturity for purposes of the debt securities and the Indenture;
-
-
if applicable, that the debt securities of the series are subject to defeasance and/or covenant defeasance;
-
-
if applicable, that the debt securities of the series will be issued in whole or in part in the form of one or more global
securities and, if so, the depositary for the global securities, the form of any legend or legends which will be borne by such global securities and any additional terms related to the exchange,
transfer and registration of securities issued in global form;
-
-
any addition to or change in the Events of Default applicable to the debt securities of the series and any change in the
right of the Trustee or the holders of the debt securities to accelerate the maturity of the debt securities of the series;
-
-
any addition to or change in the covenants described in this Prospectus applicable to the debt securities of
the series;
-
-
if the debt securities are to be subordinated to other of the Corporation's obligations, the terms of the subordination
and any related provisions;
-
-
whether the debt securities will be convertible into securities or other property, including the Corporation's common
stock or other securities, whether in addition to, or in lieu of, any payment of principal or other amount or otherwise, and whether at the option of the Corporation or otherwise, the terms and
conditions relating to conversion of the debt securities, and any other provisions relating to the conversion of the debt securities;
-
-
the obligation, if any, of the Corporation to pay to holders of any debt securities of the series amounts as may be
necessary so that net payments on the debt security, after deduction or withholding for or on account of any present or future taxes and other governmental charges imposed by any taxing authority upon
or as a result of payments on the securities, will not be less than the gross amount provided in the debt security, and the terms and conditions, if any, on which the Corporation may redeem the debt
securities rather than pay such additional amounts;
-
-
whether the Corporation will undertake to list the debt securities of the series on any securities exchange or automated
interdealer quotation system; and
-
-
any other terms of the series of debt securities.
Unless
otherwise indicated in the applicable Prospectus Supplement, the Indenture does not afford the holders the right to tender debt securities to Enbridge for repurchase or provide
for any increase in the rate or rates of interest at which the debt securities will bear interest, in the event Enbridge should become involved in a highly leveraged transaction or in the event of a
change in control of Enbridge.
Debt
securities may be issued under the Indenture bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, and may be offered and sold at a
discount below their stated principal amount. The Canadian and United States federal income tax consequences and other special considerations applicable to any such discounted debt securities
or other debt securities offered and sold at par which are treated as having been issued at a discount for Canadian and/or United States federal income tax purposes will be described in the
applicable Prospectus Supplement.
Unless
otherwise indicated in the applicable Prospectus Supplement, Enbridge may, without the consent of the holders thereof, reopen a previous issue of a series of debt securities and
issue additional debt securities of such series.
8
Ranking and Other Indebtedness
Unless otherwise indicated in an applicable Prospectus Supplement, the debt securities will be unsecured obligations and will rank
equally with all of the Corporation's other unsecured and unsubordinated indebtedness. Enbridge is a holding company that conducts substantially all of its operations and holds substantially all of
its assets through its subsidiaries. As at June 30, 2016, the long-term debt (excluding the current portion, as well as guarantees and intercompany obligations between the Corporation and its
subsidiaries) of Enbridge's subsidiaries totalled approximately $24 billion. The debt securities issued under this Prospectus will be structurally subordinated to all existing and future
liabilities, including trade payables and other indebtedness, of Enbridge's subsidiaries.
Form, Denominations and Exchange
Debt securities will be issuable solely as registered securities without coupons in denominations of US$1,000 and integral multiples of
US$1,000, or in such other denominations as may be set out in the terms of the debt securities of any particular series. The Indenture also provides that debt securities of a series may be issuable in
global form.
Registered
securities of any series will be exchangeable for other registered securities of the same series and of a like aggregate principal amount and tenor of different authorized
denominations. However, in the event there are debt securities issued that are to be convertible into other securities of the Corporation, no amounts will be payable to convert those debt securities.
The
applicable Prospectus Supplement may indicate the places to register a transfer of debt securities, if other than the corporate trust office of the Trustee. Except for certain
restrictions set forth in the Indenture, no service charge will be made for any registration of transfer or exchange of the debt securities, but the Corporation may, in certain instances, require a
sum sufficient to cover any tax or other governmental charges payable in connection with these transactions.
The
Corporation shall not be required to: (i) issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business
15 days before the mailing of a notice of redemption of debt securities of that series to be redeemed and ending at the close of business on the day of mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any registered security, or portion thereof, called for redemption, except the unredeemed portion of any registered security being redeemed
in part; or (iii) issue, register the transfer of or exchange any debt securities which have been surrendered for repayment at the option of the holder, except the portion, if any, thereof not
to be so repaid.
Payment
Unless otherwise indicated in the applicable Prospectus Supplement, payment of principal of and premium, if any, and interest, if any,
on debt securities will be made at the corporate trust office of the Trustee, 60 Wall Street, 27th Floor, New York, New York, 10005, or the Corporation may choose to pay
principal, interest and any premium by (i) check mailed or delivered to the address of the person entitled at the address appearing in the security register of the Trustee or (ii) wire
transfer to an account located in the United States of the person entitled to receive payments as specified in the securities register.
Unless
otherwise indicated in the applicable Prospectus Supplement, payment of any interest will be made to the persons in whose name the debt securities are registered at the close of
business on the day or days specified by the Corporation.
Global Securities
The registered debt securities of a series may be issued in whole or in part in global form (a "
Global
Security
") and will be registered in the name of and be deposited with a depository (the "
Depositary
"), or its nominee,
each of which will be identified in the Prospectus Supplement, if the
depository is other than The Depository Trust Company ("
DTC
") and if the Depositary's nominee is other than Cede & Co. Unless and until
exchanged, in whole or in part, for debt securities in definitive registered form, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of
the Depositary, by a
9
nominee
of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of the successor.
Unless
otherwise indicated in an applicable Prospectus Supplement with respect to a series of debt securities, DTC, New York, New York, will act as the depositary for the
debt securities. The debt securities will be issued as fully-registered securities registered in the name of Cede & Co., DTC's nominee. DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the U.S. Exchange Act. Direct participants in DTC
include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations.
If
other than as described below, the specific terms of the depository arrangement with respect to any portion of a particular series of debt securities to be represented by a Global
Security will be described in the Prospectus Supplement relating to such series. The Corporation anticipates that the following provisions will apply to all depository arrangements.
Upon
the issuance of a Global Security, the Depositary therefor will credit, on its book entry and registration system, the respective principal amounts of the debt securities
represented by the Global Security to the accounts of such persons having accounts with such Depositary ("
participants
"). Such accounts shall be
designated by the underwriters, dealers or agents participating in the distribution of the debt securities or by Enbridge if such debt securities are offered and sold directly by the Corporation.
Ownership of beneficial interests in a Global Security will be limited to participants or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a Global
Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary therefor (with respect to interests of participants) or by
participants or persons that hold through participants (with respect to interests of persons other than participants). The laws of some states in the United States may require that certain
purchasers of securities take physical delivery of such securities in definitive form.
So
long as the Depositary for a Global Security or its nominee is the registered owner of the Global Security, such Depositary or such nominee, as the case may be, will be considered the
sole owner or holder of the debt securities represented by the Global Security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Security will
not be entitled to have debt securities of the series represented by the Global Security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of
such series in definitive form and will not be considered the owners or holders thereof under the Indenture.
Beneficial
owners will not receive certificates representing their ownership interests in debt securities, except in the event that use of the book-entry system for the debt securities
is discontinued or if there shall have occurred and be continuing an Event of Default under the Indenture. The Depositary will have no knowledge of the actual beneficial owners of the debt securities;
the Depositary's records will reflect only the identity of the direct participants to whose accounts the debt securities are credited, which may or may not be the beneficial owners. The direct and
indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.
Any
payments of principal, premium, if any, and interest on Global Securities registered in the name of a Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such debt securities. None of Enbridge, the Trustee or any paying agent for debt securities represented by the Global
Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.
The
Corporation expects that the Depositary for a Global Security or its nominee, upon receipt of any payment of principal, premium or interest, will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Security as shown on the records of such Depositary. The Corporation also expects that
payments by participants to owners of beneficial interests in a Global Security held through such participants will be governed by standing instructions
10
and
customary practices, as is the case with securities held for the accounts of customers registered in "street name", and will be the responsibility of such participants.
Conveyance
of notices and other communications by the Depositary to direct participants, by direct participants to indirect participants, and by direct and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of debt securities may wish
to take certain steps to augment transmission to them of notices of significant events with respect to the debt securities, such as redemptions, tenders, defaults, and proposed amendments to
the Indenture.
Any
redemption notices relating to the debt securities will be sent to the Depositary. If less than all of the debt securities of a series are being redeemed, the Depositary may
determine by lot the amount of the interest of each direct participant in the series to be redeemed. Neither the Depositary nor its nominee will consent or vote with respect to debt securities unless
authorized by a direct participant in accordance with the Depositary's procedures. Under its procedures, the Depositary may send a proxy to the Corporation as soon as possible after the record date
for a consent or vote. The proxy would assign the Depositary's
nominee's consenting or voting rights to those direct participants to whose accounts the debt securities are credited on the relevant record date.
No
Global Security may be exchanged in whole or in part, and no transfer of a Global Security in whole or in part may be registered, in the name of any person other than the Depositary
for the Global Security or its nominee unless (1) the Depositary (A) has notified the Corporation that it is unwilling or unable to continue as Depositary for the Global Security or
(B) has ceased to be a clearing agency registered under the U.S. Exchange Act, or (2) there shall have occurred and be continuing an Event of Default under the Indenture.
Definitions
The Indenture contains, among others, definitions substantially to the following effect:
"
Consolidated Net Tangible Assets
" means all consolidated assets of the Corporation as shown on the most recent audited consolidated
balance sheet of the Corporation, less the aggregate of the following amounts reflected upon such balance sheet:
-
(a)
-
all
goodwill, deferred assets, trademarks, copyrights and other similar intangible assets;
-
(b)
-
to
the extent not already deducted in computing such assets and without duplication, depreciation, depletion, amortization, reserves and any other account
which reflects a decrease in the value of an asset or a periodic allocation of the cost of an asset; provided that no deduction shall be made under this paragraph (b) to the extent that
such amount reflects a decrease in value or periodic allocation of the cost of any asset referred to in paragraph (a) above;
-
(c)
-
minority
interests;
-
(d)
-
non-cash
current assets; and
-
(e)
-
Non-Recourse
Assets to the extent of the outstanding Non-Recourse Debt financing of such assets.
"
Consolidated Shareholders' Equity
" means the aggregate amount of shareholders' equity (including, without limitation, common share
capital, contributed surplus and retained earnings but excluding preferred share capital) of the Corporation as shown on the most recent audited consolidated balance sheet of the Corporation adjusted
by the amount by which share capital and contributed surplus has been increased or decreased (as the case may be) from the date of such balance sheet to the relevant date of determination, the
whole in accordance with Generally Accepted Accounting Principles.
"
Financial Instrument Obligations
" means obligations arising under:
-
(a)
-
any
interest swap agreement, forward rate agreement, floor, cap or collar agreement, futures or options, insurance or other similar agreement or
arrangement, or any combination thereof, entered into or guaranteed by the Corporation where the subject matter of the same is interest rates or the price, value, or amount payable thereunder is
dependent or based upon the interest rates or
11
to
the extent of the net amount due or accruing due by the Corporation thereunder (determined by marking-to-market the same in accordance with their terms).
"
Generally Accepted Accounting Principles
" means generally accepted accounting principles which are in effect from time to time in Canada,
including those accounting principles generally accepted in the United States of America from time to time, which Canadian corporations are permitted to use in Canada pursuant to
Canadian law.
"
Indebtedness
" means all items of indebtedness in respect of amounts borrowed and all Purchase Money Obligations which, in accordance with
Generally Accepted Accounting Principles, would be recorded in the financial statements as at the date as of which such Indebtedness is to be determined, and in any event including, without
duplication:
-
(a)
-
obligations
secured by any Security Interest existing on property owned subject to such Security Interest, whether or not the obligations secured thereby
shall have been assumed; and
-
(b)
-
guarantees,
indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent liabilities in respect
of obligations of another person for indebtedness of that other person in respect of any amounts borrowed by them.
"
Non-Recourse Assets
" means the assets created, developed, constructed or acquired with or in respect of which Non-Recourse Debt has been
incurred and any and all receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or
acquired and to which recourse of the lender of such Non-Recourse Debt (or any agent, trustee, receiver or other person acting on behalf of such lender) in respect of such indebtedness is
limited in all circumstances (other than in respect of false or misleading representations or warranties).
"
Non-Recourse Debt
" means any Indebtedness incurred to finance the creation, development, construction or acquisition of assets and any
increases in or extensions, renewals or refundings of any such Indebtedness, provided that the recourse of the lender thereof or any agent, trustee, receiver or other person acting on behalf of the
lender in respect of such Indebtedness or any judgment in respect thereof is limited in all
circumstances (other than in respect of false or misleading representations or warranties) to the assets created, developed, constructed or acquired in respect of which such Indebtedness has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral connected with the assets created, developed, constructed or acquired and to which the
lender has recourse.
"
Petroleum Substances
" means crude oil, crude bitumen, synthetic crude oil, petroleum, natural gas, natural gas liquids, related
hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing, including hydrogen
sulphide and sulphur.
12
"
Purchase Money Obligation
" means any monetary obligation created or assumed as part of the purchase price of real or tangible personal
property, whether or not secured, any extensions, renewals, or refundings of any such obligation, provided that the principal amount of such obligation outstanding on the date of such extension,
renewal or refunding is not increased and further provided that any security given in respect of such obligation shall not extend to any property other than the property acquired in connection with
which such obligation was created or assumed and fixed improvements, if any, erected or constructed thereon.
"
Security Interest
" means any security by way of assignment, mortgage, charge, pledge, lien, encumbrance, title retention agreement or
other security interest whatsoever, howsoever created or arising, whether absolute or contingent, fixed or floating, perfected or not.
Covenants
The Indenture contains promises by the Corporation, called "covenants" for the benefit of the holders of the debt securities. Except to
the extent that covenants are modified, deleted or added with respect to any series of debt securities, as provided in an applicable Prospectus Supplement with respect to such series of debt
securities, the Corporation will make the covenant described under the heading " Limitation on Security Interests" for the holders of the senior debt securities, but not for
the holders of subordinated debt securities, and will make each of the covenants described under the heading " Other Indenture Covenants" for the holders of all debt
securities, unless otherwise indicated in a Prospectus Supplement.
Limitation on Security Interests
The Corporation agrees in the Indenture, for the benefit of the holders of senior debt securities, but not for the benefit of the
holders of subordinated debt securities, that it will not create, assume or otherwise have outstanding any Security Interest on its assets securing any Indebtedness unless the obligations of the
Corporation in respect of all senior debt securities then outstanding shall be secured equally and rateably therewith.
This
covenant has significant exceptions which allow the Corporation to incur or allow to exist over its properties and assets Permitted Encumbrances (as defined in the
Indenture), which include, among other things:
-
-
Security Interests existing on the date of the first issuance of debt securities by the Corporation under the Indenture or
arising after that date under contractual commitments entered into prior to that date;
-
-
Security Interests securing Purchase Money Obligations;
-
-
Security Interests securing Non-Recourse Debt;
-
-
Security Interests in favour of the Corporation's subsidiaries;
-
-
Security Interests existing on property of a corporation which is merged into, or amalgamated or consolidated with, the
Corporation or the property of which is acquired by the Corporation;
-
-
Security Interests securing Indebtedness to banks or other lending institutions incurred in the ordinary course of
business, repayable on demand or maturing within 18 months of incurrence or renewal or extension;
-
-
Security Interests on or against cash or marketable debt securities pledged to secure Financial Instrument Obligations;
-
-
Security Interests in respect of:
-
-
certain liens for taxes, assessments and workmen's compensation assessments, unemployment insurance or other social
security obligations,
-
-
liens and certain rights under leases,
-
-
certain obligations affecting the property of the Corporation to governmental or public authorities, with respect to
franchises, grants, licenses or permits and title defects arising because structures or
13
In
addition, the Indenture permits the Corporation to incur or allow to exist any other Security Interest or Security Interests if the amount of Indebtedness secured under the Security
Interest or Security Interests does not exceed 5% of the Corporation's Consolidated Net Tangible Assets.
The
Indenture covenant restricting Security Interests will not restrict the Corporation's ability to sell its property and other assets and will not restrict any subsidiary of the
Corporation from creating, assuming or otherwise having outstanding any Security Interests on its assets.
Other Indenture Covenants
Except to the extent that covenants are modified, deleted or added with respect to any series of debt securities, as provided in an
applicable Prospectus Supplement with respect to such series of debt securities, the Corporation will covenant with respect to each series of debt securities to (1) duly and punctually pay
amounts due on the debt securities; (2) maintain an office or agency where debt securities may be presented or surrendered for payment, where debt securities may be surrendered for registration
of transfer or exchange and where notices and demands to the Corporation may be served; (3) deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate
stating whether or not the Corporation is in default under the Indenture; (4) pay before delinquency, taxes, assessments and governmental charges and lawful claims for labour, materials and
supplies which, if unpaid, might by law become a lien upon the property of the Corporation, subject to the right of the Corporation to contest the validity of a charge, assessment or claim in good
faith; and (5) maintain and keep in good condition properties used or useful in the conduct of its business and make necessary repairs and improvements as in the judgment of the Corporation are
necessary to carry on the Corporation's business; provided, that the Corporation may discontinue operating or maintaining any of its properties if, in the judgment of the Corporation, the
discontinuance is desirable in the conduct of the Corporation's business and not disadvantageous in any material respect to the holders of the debt securities.
Subject
to the provision described under the heading " Mergers, Consolidations and Sales of Assets" below, the Corporation will also covenant that it will do
all things necessary to preserve and keep in full force
14
and
effect its existence, rights and franchises; provided that the Corporation is not required to preserve any right or franchise if the board of directors of the Corporation determines that
preservation of the right or franchise is no longer desirable in the conduct of the business of the Corporation and that its loss is not disadvantageous in any material respect to the holders of the
debt securities.
Waiver of Covenants
Except as otherwise provided in an applicable Prospectus Supplement with respect to any series of debt securities under the Indenture,
the Corporation may omit in any particular instance to comply with any term, provision or condition in any covenant for such series, if before the time for such compliance the holders of a majority of
the principal amount of the outstanding securities of the series waive compliance with the applicable term, provision or condition.
Mergers, Consolidations and Sales of Assets
The Corporation may consolidate or amalgamate with or merge into or enter into any statutory arrangement for such purpose with any
other person or convey, transfer or lease its properties and assets substantially as an entirety to any person, so long as, among other requirements:
-
(a)
-
the
successor to the consolidation, amalgamation, merger or arrangement is organized under the laws of Canada, or any Province or Territory, the
United States of America, or any State or the District of Columbia, and expressly assumes the obligation to pay the principal of and any premium and interest on all of the debt securities and
perform or observe the covenants and obligations contained in the Indenture;
-
(b)
-
immediately
after giving effect to the transaction, no Event of Default, or event which, after notice or lapse of time or both, would become an Event of
Default, will have happened and be continuing; and
-
(c)
-
if,
as a result of any such consolidation, amalgamation, merger or arrangement, properties or assets of the Corporation would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which would not be permitted by the Indenture, the Corporation or such successor, as the case may be, shall take such steps as shall be necessary
effectively to secure the senior debt securities equally and ratably with (or prior to) all indebtedness secured thereby.
Upon
any consolidation, amalgamation, merger or arrangement of the Corporation or conveyance, transfer or lease of properties and assets of the Corporation substantially as an entirety,
the successor to the Corporation will succeed to every right and power of the Corporation under the Indenture, and the Corporation will be relieved of all obligations and covenants under the Indenture
and the debt securities.
Payment of Additional Amounts
Unless otherwise specified in an applicable Prospectus Supplement, the Corporation will, subject to the exceptions and limitations set
forth below, pay to the holder of any debt security who is a non-resident of Canada under the
Income Tax Act
(Canada) such additional amounts as
may be necessary so that every net payment on such debt security, after deduction or withholding by the Corporation or any of its paying agents for or on account of any present or future tax,
assessment or other governmental charge (including penalties, interest and other liabilities related thereto) imposed by the government of Canada (or any political subdivision or taxing
authority thereof or therein) (collectively, "
Canadian Taxes
") upon or as a result of such payment, will not be less than the amount provided in such
debt security or in such coupon to be then due and payable (and the Corporation will remit the full amount withheld to the relevant authority in accordance with applicable law). However, the
Corporation will not be required to make any payment of additional amounts:
-
(a)
-
to
any person in respect of whom such taxes are required to be withheld or deducted as a result of such person or any other person that has a beneficial
interest in respect of any payment under the debt security not dealing at arm's length with the Corporation (within the meaning of the
Income
Tax Act
(Canada));
15
-
(b)
-
to
any person by reason of such person being connected with Canada (otherwise than merely by holding or ownership of any series of debt securities or
receiving any payments or exercising any rights thereunder), including without limitation a non-resident insurer who carries on an insurance business in Canada and in a country other
than Canada;
-
(c)
-
for
or on account of any tax, assessment or other governmental charge which would not have been so imposed but for: (i) the presentation by the
holder of such debt security or coupon for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later; or (ii) the holder's failure to comply with any certification, identification, information, documentation or other reporting requirements if compliance is required
by law, regulation, administrative practice or an applicable treaty as a precondition to exemption from or a reduction in the rate of deduction or withholding of, any such taxes, assessment
or charge;
-
(d)
-
for
or on account of any estate, inheritance, gift, sales, transfer, personal property tax or any similar tax, assessment or other governmental charge;
-
(e)
-
for
or on account of any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment to a person on a debt
security if such payment can be made to such person without such withholding by at least one other paying agent the identity of which is provided to such person;
-
(f)
-
for
or on account of any tax, assessment or other governmental charge which is payable otherwise than by withholding from a payment on a debt
security; or
-
(g)
-
for
any combination of items (a), (b), (c), (d), (e) and (f);
nor
will additional amounts be paid with respect to any payment on a debt security to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent
such payment would be required by the laws of Canada (or any political subdivision thereof) to be included in the income for Canadian federal income tax purposes of a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to payment of the additional amounts had such beneficiary, settlor, member or
beneficial owner been the holder of such debt security.
The
Corporation will furnish to the holders of the debt securities, within 30 days after the date of the payment of any Canadian Taxes is due under applicable law, certified
copies of tax receipts or other documents evidencing such payment.
Wherever
in the Indenture there is mentioned, in any context, the payment of principal (and premium, if any), interest or any other amount payable under or with respect to a debt
security, such mention shall be deemed to include mention of the payment of additional amounts to the extent that, in such context additional amounts are, were or would be payable in respect thereof.
Redemption
If and to the extent specified in an applicable Prospectus Supplement, the debt securities of a series will be subject to redemption at
the time or times specified therein, at a redemption price equal to the principal amount thereof together with accrued and unpaid interest to the date fixed for redemption, upon the giving of a
notice. Notice of redemption of the debt securities of such series will be given once not more than 60 nor less than 30 days prior to the date fixed for redemption and will specify the
date fixed for redemption.
Tax Redemption
Unless otherwise specified in an applicable Prospectus Supplement, each series of debt securities will be subject to redemption at any
time at a redemption price equal to the principal amount of the debt securities, together with accrued and unpaid interest to the date fixed for redemption, upon the giving of the notice as described
above, if the Corporation (or its successor) determines that (1) as a result of (A) any amendment to or change (including any announced prospective change) in the laws or related
regulations of Canada (or the Corporation's successor's jurisdiction of organization) or of any applicable political subdivision or taxing
16
authority
or (B) any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority announced
or becoming effective on or after the date of the applicable Prospectus Supplement under which the debt securities of such series are offered, the Corporation has or will become obligated to pay, on
the next interest payment date for the debt securities of such series, additional amounts with respect to any debt security of such series as described under " Payment of
Additional Amounts" above, or (2) on or after the date of the applicable Prospectus Supplement under which the debt securities of such series are offered, any action has been taken by any
taxing authority of, or any decision has been rendered by a court in, Canada (or the Corporation's successor's jurisdiction of organization) or any applicable political subdivision or taxing
authority, including any of those actions specified in (1) above, whether or not the action was taken or decision rendered with respect to the Corporation, or any change, amendment, application
or interpretation is officially proposed, which, in the opinion of the Corporation's counsel, will result in the Corporation becoming obligated to pay, on the next interest payment date, additional
amounts with respect to any debt security of such series, and the Corporation has determined that the obligation cannot be avoided by the use of reasonable available measures.
Provision of Financial Information
The Corporation will file with the Trustee, within 15 days after it files them with the SEC, copies of its annual report and of
the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Corporation is required to file
with the SEC pursuant to Section 13 or 15(d) of the U.S. Exchange Act. If the Corporation is not required to file such information, documents or reports with the SEC, then the
Corporation will file with the Trustee such periodic reports as the Corporation files with the securities commission or corresponding securities regulatory authority in each of the Provinces of Canada
within 15 days after it files them with such securities commissions or securities regulatory authorities.
Events of Default
Unless otherwise specified in an applicable Prospectus Supplement relating to a particular series of debt securities, the following
events are defined in the Indenture as "Events of Default" with respect to debt securities of any series:
-
(a)
-
the
failure of the Corporation to pay when due the principal of or premium (if any) on any debt securities of that series or, if the debt securities
of that series are convertible into other securities, any amounts due upon the conversion of the debt securities of that series;
-
(b)
-
the
failure of the Corporation, continuing for 30 days, to pay any interest due on any debt securities of that series;
-
(c)
-
the
failure of the Corporation to deposit any sinking fund payment due on any debt securities of that series;
-
(d)
-
the
breach or violation of any covenant or condition (other than as referred to in (a) and (b) above), which continues for a period of
60 days after notice from the Trustee or from holders of at least 25% of the principal amount of all outstanding debt securities of that series, in either case, if such covenant or condition
applies to the debt securities of that series;
-
(e)
-
default
in payment at maturity, including any applicable grace period, or default in the performance or observance of any other covenant, term, agreement or
condition, with respect to any single item of Indebtedness in an amount in excess of 5% of Consolidated Shareholders' Equity or with respect to more than two items of Indebtedness in an aggregate
amount in excess of 10% of Consolidated Shareholders' Equity and, if such Indebtedness has not already matured in accordance with its terms, such indebtedness has been accelerated, if such
Indebtedness has not been discharged or such acceleration shall not have been rescinded or annulled within a period of 10 days after there shall have been given, by registered or certified
mail, to the Corporation by the Trustee or to the Corporation and the Trustee by the holders of at least 25% of the principal amount of the outstanding debt securities of that series a written
notice specifying the default and requiring the Corporation to cause such
17
Indebtedness
to be discharged or cause such acceleration to be rescinded or annulled, provided that if the Indebtedness is discharged or the applicable default under the indebtedness is waived, then
the Event of Default under the Indenture will be deemed waived;
-
(f)
-
certain
events of bankruptcy, insolvency or reorganization involving the Corporation; or
-
(g)
-
any
other Event of Default provided with respect to debt securities of that series.
If
an Event of Default occurs and is continuing with respect to any series of debt securities, then and in every such case the Trustee or the holders of at least 25% of the aggregate
principal amount of the outstanding debt securities of such affected series may, subject to any subordination provisions thereof, declare the entire principal amount (or, if the debt securities of
that series are original issue discount debt securities, such portion of the principal amount as may be specified in the terms of that series) of all debt securities of such series and all interest
thereon to be immediately due and payable. However, at any time after a declaration of acceleration with respect to any series of debt securities has been made, but before a judgment or decree for
payment of the money due has been obtained, the holders of a majority in principal amount of the outstanding debt securities of that series, by written notice to the Corporation and the Trustee under
certain circumstances (which include payment or deposit with the Trustee of outstanding principal, premium and interest, unless the Prospectus Supplement applicable to an issue of debt securities
otherwise provides), may rescind and annul such acceleration.
The
Indenture provides that, subject to the duty of the Trustee during default to act with the required standard of care, the Trustee shall be under no obligation to exercise any of its
rights and powers under the Indenture at the request or direction of any of the holders, unless such holders shall have offered to the Trustee reasonable indemnity. Subject to such provisions for
indemnification of the Trustee and certain other limitations set forth in the Indenture, the holders of a majority in principal amount of the outstanding debt securities of a series affected by an
Event of Default shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the debt securities of such series.
No
holder of a debt security of any series will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or a Trustee, or for any
other remedy thereunder, unless (a) such holder has previously given to the Trustee written notice of a continuing Event of Default with respect to the debt securities of such series affected
by such Event of Default, (b) the holders of at least 25% of the aggregate principal amount of the outstanding debt securities of such series affected by such Event of Default have made written
request, and such holder or holders have offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee, and (c) the Trustee has failed to institute such proceeding, and
has not received from the holders of a majority in aggregate principal amount of the outstanding debt securities of such series affected by such Event of Default a direction inconsistent with such
request, within 60 days after such notice, request and offer. However, such limitations do not apply to a suit instituted by the holder of a debt security for the enforcement of payment of the
principal of or any premium or interest on such debt security on or after the applicable due date specified in such debt security.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Corporation and the Trustee with the consent of the holders of a
majority of the principal amount of the outstanding debt securities of each series issued under the Indenture affected by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the holder of each outstanding debt security of such affected series: (1) change the stated maturity of the principal of, or any instalment of interest,
if any, on any debt security; (2) reduce the principal amount of, or the premium, if any, or the rate of interest, if any, on any debt security; (3) change the place of payment;
(4) change the currency or currency unit of payment of principal of (or premium, if any) or interest, if any, on any debt security; (5) impair the right to institute suit for the
enforcement of any payment on or with respect to any debt security; (6) adversely affect any right to convert or exchange any debt security; (7) reduce the percentage of principal amount
of outstanding debt securities of such series, the consent of the holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults; (8) modify the
18
provisions
of the Indenture relating to subordination in a manner that adversely affects the rights of the holders of debt securities; or (9) modify any provisions of the Indenture relating to
the modification and
amendment of the Indenture or the waiver of past defaults or covenants except as otherwise specified in the Indenture.
The
holders of a majority of the principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive, insofar as
that series is concerned, compliance by the Corporation with certain restrictive provisions of the Indenture, including the covenants and events of default. The holders of a majority in principal
amount of outstanding debt securities of any series may waive any past default under the Indenture with respect to that series, except a default in the payment of the principal of (or premium,
if any) and interest, if any, on any debt security of that series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each
outstanding debt security of that series. The Indenture or the debt securities may be amended or supplemented, without the consent of any holder of debt securities, in order, among other purposes, to
cure any ambiguity or inconsistency or to make any change that does not have an adverse effect on the rights of any holder of debt securities.
Defeasance
The Indenture provides that, at its option, the Corporation will be discharged from any and all obligations in respect of the
outstanding debt securities of any series upon irrevocable deposit with the Trustee, in trust, of money and/or United States government securities which will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent public accountants to pay the principal of and premium, if any, and each instalment of interest, if any, on the outstanding
debt securities of such series ("
Defeasance
") (except with respect to the authentication, transfer, exchange or replacement of debt securities or the
maintenance of a place of payment and certain other obligations set forth in the Indenture). Such trust may only be established if among other things (1) the Corporation has delivered to the
Trustee an opinion of counsel in the United States stating that (a) the Corporation has received from, or there has been published by, the Internal Revenue Service a ruling, or
(b) since the date of execution of the Indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that the holders of the
outstanding debt securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such Defeasance and will be subject to
United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Defeasance had not occurred; (2) the Corporation has
delivered to the Trustee an opinion of counsel in Canada or a ruling from the Canada Revenue Agency ("
CRA
") to the effect that the holders of such
outstanding debt securities of such series will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other tax purposes as a result of such Defeasance and will
be subject to Canadian federal or provincial income and other tax on the same amounts, in the same manner and at the same times as would have been the case had such Defeasance not occurred
(and for the purposes of such opinion, such Canadian counsel shall assume that holders of the outstanding debt securities of such series include holders who are not resident in Canada);
(3) no Event of Default or event that, with the passing of time or the giving of notice, or both, shall constitute an Event of Default shall have occurred and be continuing on the date of such
deposit; (4) the Corporation is not an "insolvent person" within the meaning of the
Bankruptcy and Insolvency Act
(Canada); (5) the
Corporation has delivered to the Trustee an opinion of counsel to the effect that such deposit shall not cause the Trustee or the trust so created to be subject to the
United States Investment Company Act of
1940
, as amended; and (6) other customary conditions precedent are satisfied. The Corporation may
exercise its Defeasance option notwithstanding its prior exercise of its Covenant Defeasance option described in the following paragraph if the Corporation meets the conditions described in the
preceding sentence at the time the Corporation exercises the Defeasance option.
The
Indenture provides that, at its option, the Corporation may omit to comply with covenants, including the covenants described above under the heading "Covenants", and such omission
shall not be deemed to be an Event of Default under the Indenture and the outstanding debt securities upon irrevocable deposit with the Trustee, in trust, of money and/or United States
government securities which will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants to pay the principal of and premium, if any, and
each instalment of interest, if any, on the outstanding debt securities ("
Covenant Defeasance
"). If the Corporation exercises its Covenant Defeasance
option, the obligations under the Indenture
19
other
than with respect to such covenants and the Events of Default other than with respect to such covenants shall remain in full force and effect. Such trust may only be established if, among other
things, (1) the Corporation has delivered to the Trustee an opinion of counsel in the United States to the effect that the holders of the outstanding debt securities will not recognize
income, gain or loss for United States federal income tax purposes as a result of such Covenant Defeasance and will be subject to United States federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (2) the Corporation has delivered to the Trustee an opinion of counsel in Canada
or a ruling from the CRA to the effect that the holders of such outstanding debt securities will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other tax
purposes as a result of such Covenant Defeasance and will be subject to Canadian federal or provincial income and other tax on the same amounts, in the same manner and at the same times as would have
been the case had such Covenant Defeasance not occurred (and for the purposes of such opinion, such Canadian counsel shall assume that holders of the outstanding debt securities include holders
who are not resident in Canada); (3) no Event of Default or event that, with the passing of time or the giving of notice, or both, shall constitute an Event of Default shall have occurred and
be continuing on the date of such deposit; (4) the Corporation is not an "insolvent person" within the meaning of the
Bankruptcy and Insolvency
Act
(Canada); (5) the Corporation has delivered to the Trustee an opinion of counsel to the effect that such deposit shall not cause the Trustee or the trust so created
to be subject to the
United States Investment Company Act of 1940
, as amended; and (6) other customary conditions precedent
are satisfied.
Consent to Jurisdiction and Service
Under the Indenture, the Corporation agrees to appoint CT Corporation System, 111 Eighth Avenue, New York,
New York 10011, as its authorized agent for service of process in any suit or proceeding arising out of or relating to the debt securities or the Indenture and for actions brought under federal
or state securities laws in any federal or state court located in the city of New York, and irrevocably submits to such jurisdiction.
Governing Law
The debt securities and the Indenture will be governed by and construed in accordance with the laws of the State of New York.
DESCRIPTION OF SHARE CAPITAL
In this section, the terms "
Corporation
" and
"
Enbridge
" refer only to Enbridge Inc. and not to its subsidiaries. The following sets forth the terms and provisions of the existing capital of
the Corporation. The following description is subject to, and qualified by reference to, the terms and provisions of the Corporation's articles and by-laws. The Corporation is authorized to issue an
unlimited number of common shares and an unlimited number of preference shares, issuable in series.
Common Shares
Each common share of the Corporation entitles the holder to one vote for each common share held at all meetings of shareholders of the
Corporation, except meetings at which only holders of another specified class or series of shares are entitled to vote, to receive dividends if, as and when declared by the board of directors of the
Corporation, subject to prior satisfaction of preferential dividends applicable to any preference shares, and to participate rateably in any distribution of the assets of the Corporation upon a
liquidation, dissolution or winding up, subject to prior rights and privileges attaching to the preference shares.
Under
the dividend reinvestment and share purchase plan of the Corporation, registered shareholders may reinvest their dividends in additional common shares of the Corporation or make
optional cash payments to purchase additional common shares, in either case, free of brokerage or other charges.
The
registrar and transfer agent for the common shares in Canada is CST Trust Company at its principal transfer offices in Vancouver, British Columbia, Calgary, Alberta, Winnipeg,
Manitoba, Toronto, Ontario, Montréal, Québec and Halifax, Nova Scotia. The co-registrar and co-transfer agent for the common shares in the United States is
Computershare Shareowner Services LLC at its principal office in Jersey City, New Jersey.
20
Shareholder Rights Plan
The Corporation has a shareholder rights plan (the "
Shareholder Rights Plan
")
that is designed to encourage the fair treatment of shareholders in connection with any take-over bid for the Corporation. Rights issued under the Shareholder Rights Plan become exercisable when a
person, and any related parties, acquires or announces the intention to acquire 20% or more of the Corporation's outstanding common shares without complying with certain provisions set out in the
Shareholder Rights Plan or without approval of the board of directors of the Corporation. Should such an acquisition or announcement occur, each rights holder, other than the acquiring person and its
related parties, will have the right to purchase common shares of the Corporation at a 50% discount to the market price at that time. For further particulars, reference should be made to the
Shareholder Rights Plan, a copy of which may be obtained by contacting the Manager, Investor Relations, Enbridge, 200, 425 - 1st Street S.W., Calgary, Alberta,
T2P 3L8; telephone: 1-800-481-2804; fax: 403-231-5780; email: investor.relations@enbridge.com.
Preference Shares
Shares Issuable in Series
The preference shares may be issued at any time or from time to time in one or more series. Before any shares of a series are issued,
the board of directors of the Corporation shall fix the number of shares that will form such series and shall, subject to the limitations set out in the articles of the Corporation, determine the
designation, rights, privileges, restrictions and conditions to be attached to the preference shares of such series, except that no series shall be granted the right to vote at a general meeting of
the shareholders of the Corporation or the right to be convertible or exchangeable for common shares, directly or indirectly.
For
preference shares issued that are to be convertible into other securities of the Corporation, including other series of preference shares, no amounts will be payable to convert those
preference shares.
Priority
The preference shares of each series shall rank on a parity with the preference shares of every other series with respect to dividends
and return of capital and shall be entitled to a preference over the common shares and over any other shares ranking junior to the preference shares with respect to priority in payment of dividends
and in the distribution of assets in the event of liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or any other distribution of the assets of the
Corporation among its shareholders for the purpose of winding-up its affairs.
Voting Rights
Except as required by law, holders of the preference shares as a class shall not be entitled to receive notice of, to attend or to vote
at any meeting of the shareholders of the Corporation, provided that the rights, privileges, restrictions and conditions attached to the preference shares as a class may be added to, changed or
removed only with the approval of the holders of the preference shares given in such manner as may then be required by law, at a meeting of the holders of the preference shares duly called for
that purpose.
CERTAIN INCOME TAX CONSIDERATIONS
The applicable Prospectus Supplement will describe material Canadian federal income tax consequences to an investor of acquiring any
Securities offered thereunder, including whether the payments of dividends on common shares or preference shares or payments of principal, premium, if any, and interest on debt securities payable to a
non-resident of Canada will be subject to Canadian non-resident withholding tax.
The
applicable Prospectus Supplement will also describe material United States federal income tax consequences to an initial investor who is a United States person (within
the meaning of the United States Internal Revenue Code) of the acquisition, ownership and disposition of any Securities offered thereunder, including, to the extent applicable, any such
material consequences relating to debt securities payable in a currency other than the U.S. dollar, issued at an original issue discount for United States federal income tax purposes or
containing early redemption provisions or other special items.
21
PLAN OF DISTRIBUTION
The Corporation may sell the Securities to or through underwriters, agents or dealers and also may sell the Securities directly to
purchasers pursuant to applicable statutory exemptions or through agents.
The
distribution of the Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time
of sale, or at prices related to such prevailing market prices to be negotiated with purchasers.
The
Prospectus Supplement relating to each series of the Securities will also set forth the terms of the offering of the Securities, including to the extent applicable, the initial
offering price, the proceeds to the Corporation, the underwriting concessions or commissions, and any other discounts or concessions to be allowed or re-allowed to dealers. Underwriters or agents with
respect to Securities sold to or through underwriters or agents will be named in the Prospectus Supplement relating to such Securities.
In
connection with the sale of the Securities, underwriters may receive compensation from the Corporation or from purchasers of the Securities for whom they may act as agents in the form
of discounts, concessions or commissions. Any such commissions will be paid either using a portion of the funds received in connection with the sale of the Securities or out of the general funds of
the Corporation.
Under
agreements which may be entered into by the Corporation, underwriters, dealers and agents who participate in the distribution of the Securities may be entitled to indemnification
by the Corporation against certain liabilities, including liabilities under securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be
required to make in respect thereof.
In
connection with any offering of Securities, the underwriters, agents or dealers may over-allot or effect transactions which stabilize or maintain the market price of the Securities
offered at levels above those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.
RISK FACTORS
Investment in the Securities is subject to various risks. Before deciding whether to invest in any Securities, investors should
consider carefully the risks incorporated by reference in this Prospectus (including subsequently filed documents incorporated by reference) and those described in any Prospectus Supplement.
Discussions
of certain risks affecting the Corporation in connection with its business are provided in the AIF and in the Corporation's management's discussion and analysis of financial
condition and results of operations for the year ended December 31, 2015 filed with the various securities regulatory authorities, which is incorporated by reference in this Prospectus.
LEGAL MATTERS
Unless otherwise specified in the Prospectus Supplement relating to the Securities, certain legal matters relating to Canadian law in
connection with the offering of Securities will be passed upon for the Corporation by McCarthy Tétrault LLP, Calgary, Alberta, Canada.
The
partners and associates of McCarthy Tétrault LLP as a group, beneficially own, directly or indirectly, less than 1% of the outstanding securities of any class
or series of the Corporation.
EXPERTS
The consolidated annual financial statements of the Corporation for the years ended December 31, 2015 and 2014 incorporated by
reference in this Prospectus have been so incorporated in reliance on the audit reports, which are also incorporated by reference in this Prospectus, of PricewaterhouseCoopers LLP, Chartered
Professional Accountants, Calgary, Alberta, on the authority of such firm as experts in auditing and accounting. In connection with the audit of the Corporation's consolidated annual financial
statements for the year ended December 31, 2015, PricewaterhouseCoopers LLP confirmed that they are independent to the Corporation within the meaning of the Code of Professional Conduct
of the Chartered Professional Accountants of Alberta.
22
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been filed with the SEC either separately or as exhibits to the registration statement of which this
Prospectus forms a part: the documents listed herein under "Documents Incorporated by Reference"; the consent of PricewaterhouseCoopers LLP; certain powers of attorney; the Indenture;
appointment of agent for service of process and undertaking on Form F-X; and the Statement of Eligibility of the Trustee on Form T-1.
ENFORCEMENT OF CIVIL LIABILITIES
The Corporation is a Canadian corporation, and the majority of its assets and operations are located, and the majority of its revenues
are derived, outside the United States. The Corporation has appointed Enbridge (U.S.) Inc. as its agent to receive service of process with respect to any action brought against it in any
federal or state court in the United States arising from any offering conducted under this Prospectus. However, it may not be possible for investors to enforce outside the United States
judgments against the Corporation obtained in the United States in any such actions, including actions predicated upon the civil liability provisions of the United States federal and
state securities laws. In addition, certain of the directors and officers of the Corporation are residents of Canada or other jurisdictions outside of the United States, and all or a
substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may not be possible for investors to effect service of process
within the United States upon those persons, or to enforce against them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of
United States federal and state securities laws.
23
US$1,500,000,000
Enbridge Inc.
US$750,000,000 4.250% Senior Notes due 2026
US$750,000,000 5.500% Senior Notes due 2046
Prospectus Supplement
November 21, 2016
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Credit Agricole CIB
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HSBC
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Wells Fargo Securities
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IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
TABLE OF CONTENTS
EXCHANGE RATE DATA
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
DOCUMENTS INCORPORATED BY REFERENCE
SUMMARY
The Corporation
Recent Developments
The Offering
RISK FACTORS
Risks Related to the Notes
Risks Related to our Business
Risks Related to the Merger Transaction and Spectra Energy's Business
SELECTED CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED CAPITALIZATION
USE OF PROCEEDS
EARNINGS COVERAGE RATIOS
DESCRIPTION OF THE NOTES
MATERIAL INCOME TAX CONSIDERATIONS
UNDERWRITING
LEGAL MATTERS
EXPERTS
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
DOCUMENTS INCORPORATED BY REFERENCE
CERTAIN AVAILABLE INFORMATION
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
THE CORPORATION
USE OF PROCEEDS
EARNINGS COVERAGE RATIO
DESCRIPTION OF DEBT SECURITIES
DESCRIPTION OF SHARE CAPITAL
CERTAIN INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
RISK FACTORS
LEGAL MATTERS
EXPERTS
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
ENFORCEMENT OF CIVIL LIABILITIES
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