By Nathalie Tadena
Spectra Energy Corp. (SE) said it plans to drop down its
remaining U.S. transmission and storage assets to Spectra Energy
Partners (SEP) by the end of the year, a move that will allow both
companies to increase their dividends.
Spectra Energy, which operates natural-gas pipelines and storage
facilities in North America, said it expects to provide its
investors with dividend growth of about 12 cents a year versus its
current commitment of eight cents a year by completing the asset
drop-down. The move will also allow Spectra Energy Partners to
increase its quarterly distribution rate to a penny versus its
current payout of three-quarters of a cent.
Like its peers, Spectra Energy has faced strong headwinds from
low commodity prices, which weighed on its bottom line in recent
quarters. Last month, the company reported its first-quarter
earnings rose 2.1%, boosted by stronger distribution revenue though
transmission revenue was down.
Spectra Energy shares were up 2.1% to $30.95 after hours
Tuesday. The stock is up 11% since the start of the year.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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