Enbridge Income Fund to Acquire $1.164 Billion of Crude Oil Storage and Renewable Power Generation Assets from Enbridge Inc.

CALGARY, ALBERTA--(Marketwire - Oct. 25, 2012) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRE SERVICES

Enbridge Income Fund Holdings Inc. (the "Company") (TSX:ENF) and Enbridge Income Fund (the "Fund") announced today that indirect wholly-owned subsidiaries of the Fund have entered into an agreement to acquire entities which own crude oil storage and renewable energy assets (the "Assets") from Enbridge Inc. (TSX:ENB) (NYSE:ENB) and certain of its indirect wholly-owned subsidiaries (collectively, "Enbridge") for approximately $1.164 billion (the "Transaction"). The Company also announced that to finance its equity investment in the Fund pursuant to the Transaction, it has entered into a bought deal agreement led by RBC Capital Markets and CIBC World Markets Inc. for the sale of an aggregate of 9,597,000 subscription receipts of the Company ("Subscription Receipts") at a price of $23.15 per Subscription Receipt, for gross proceeds of $222.2 million.

As Enbridge is a related party to the Fund and the Company, the Company will seek the approval of the Transaction by its shareholders at a special meeting to be held on December 7, 2012. Subject to completion of the financing and receipt of regulatory and third party approvals, the Transaction is expected to close shortly after receipt of the requisite approval of a majority of the shareholders of the Company.

Assets to be Acquired

The Assets consist of five distinct facilities, comprised of crude oil storage assets in Alberta and renewable power generation assets in Ontario.

The Hardisty Contract Terminals and the Hardisty Storage Caverns provide approximately 11 million barrels of total crude oil storage capacity located above and below ground, representing one of the largest contract crude oil terminals in North America. The crude oil storage facilities are currently operating under long term take-or-pay storage contracts with creditworthy counterparties for the full storage capacity. The storage contracts have weighted average remaining terms of approximately 22 years and generate a stable cash flow stream as revenue generated by these storage contracts is mostly derived from fixed fees charged for a specified amount of storage capacity.

The renewable energy assets consist of the Greenwich Wind Project, an on-shore wind project with an installed capacity of 98.9 MW, and the Amherstburg Solar Project and Tilbury Solar Project, both ground mount solar projects with installed capacities of 15 MW and 5 MW, respectively. The renewable energy assets are currently operating under long-term, fixed price power purchase agreements ("PPAs") with the Ontario Power Authority ("OPA") and have full service operating and maintenance contracts with third parties. The weighted average remaining terms of the PPAs exceed 18 years for all three renewable energy assets.

Enbridge, through its affiliates, will continue to manage the crude oil storage and renewable energy assets pursuant to management and administrative services agreements.

Collectively, the Assets are expected to generate within the Fund earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $97 million per year on average over a long term planning horizon. Certain of the Assets are expected to have tax pools available for accelerated deductions, providing further early-year cash benefits to the Fund.

Benefits of the Transaction

"The prospect of acquiring this portfolio of assets is exciting," noted John Whelen, President, Enbridge Income Fund Holdings Inc. "We believe that these facilities would be a great fit for the Fund. They are all underpinned by long-term fixed price contracts and none have direct exposure to commodity price or foreign exchange fluctuations. If approved by shareholders, the Transaction would substantially scale up and further diversify the Fund's sources of low risk cash flow, reinforcing its value to investors seeking a steady and predictable payout of cash flow from low-risk energy infrastructure assets. On a pro-forma basis, after giving effect to the Transaction, the percentage of total distributable cash flow generated by our Crude Oil Transportation and Storage business would be approximately 40%, while Green Power and Gas Transmission would be approximately 40% and 20%, respectively.

"The Transaction is expected to be accretive to the Company's distributable cash flow immediately and by approximately 4% per share on a sustainable basis," said Mr. Whelen.

Financing of the Transaction by the Fund

The Fund intends to finance the Transaction through a combination of debt and equity, as set out in the table below.

Fund Sources of Financing
(millions of Canadian dollars)
Fund trust units issued to the Company (11,983,000 units at $23.15 per unit)	$	277
ECT preferred units issued to Enbridge (13,159,000 units at $23.15 per unit)		305
Loan from Enbridge		582
		1,164

Equity financing for the acquisition of the Assets is expected to be provided through the issuance of trust units of the Fund to the Company and preferred units of Enbridge Commercial Trust ("ECT") to Enbridge immediately prior to closing. All of the Fund trust units and the ECT preferred units will be issued at a price of $23.15 per unit. In addition, Enbridge will provide the Fund with a $582 million unsecured, subordinated 10 year loan at a fixed interest rate of 5% per annum. The loan may be prepaid at any time without penalty or bonus.

Financing of the Transaction by the Company

The Company will finance its subscription for Fund trust units through the issuance of $222.2 million of Subscription Receipts pursuant to a public offering and the issuance of $55.2 million of common shares of the Company ("Common Shares") to Enbridge on a private placement basis, which will enable Enbridge to maintain its 19.9% interest in the Company. The 2,385,000 Common Shares will be issued to Enbridge immediately prior to the closing of the Transaction at a price of $23.15 per Common Share.

The Company has agreed to sell an aggregate of 9,597,000 Subscription Receipts to a syndicate led by RBC Capital Markets and CIBC World Markets Inc. on a bought deal basis at a price of $23.15 per Subscription Receipt for gross proceeds of $222.2 million (the "Offering").

If the Transaction proceeds and upon satisfaction of certain escrow release conditions, immediately prior to the closing of the Transaction, each holder of Subscription Receipts will automatically receive one Common Share for each Subscription Receipt held, without further action or additional consideration on the part of the holder, together with an amount equal to any dividends paid to holders of the Common Shares pursuant to a record date occurring on or after the date of the underwriting agreement in respect of the Offering and the day immediately prior to the closing of the Transaction, net of any applicable withholding taxes. Any dividend declared but not yet paid on the day prior to the closing of the Transaction will be paid to such Subscription Receipt holders at the time of the payment of such dividend to shareholders of the Company.

The proceeds from the sale of Subscription Receipts will be held by an escrow agent and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments) until the earlier of the closing of the Transaction and February 28, 2013 (the "Termination Date"). If the closing of the Transaction does not occur on or before the Termination Date, or is terminated at any earlier time, the Subscription Receipts will be terminated and cancelled, and the full purchase price of the Subscription Receipts will be returned to holders of Subscription Receipts, together with their pro rata portion of any interest earned thereon.

The Subscription Receipts will be offered in all of the provinces of Canada pursuant to a short form prospectus. Closing of the Offering is subject to certain conditions, including receipt of the approval of the Toronto Stock Exchange and all other necessary regulatory approvals.

Effect of the Transaction on Ownership of the Fund and the Company

If the Transaction is completed, the Company's holdings of Fund trust units will increase from 80.7% to 84.5% of the issued and outstanding Fund trust units and Enbridge's holdings of Fund trust units will be reduced from 19.3% to 15.5%. Enbridge will continue to own all of the issued and outstanding ECT preferred units, which are convertible at any time and from time to time into Fund trust units on a 1:1 basis. Enbridge's economic interest in the Fund as a whole, represented by its direct ownership of Fund trust units and ECT preferred units, as well as its 19.9% interest of Common Shares, will be reduced from 69.2% to 67.8%.

Special Committee and Board Recommendation

As the acquisition of the Assets would constitute a "related party transaction" under applicable securities laws, a special committee consisting of independent trustees of ECT ("Special Committee") was formed to review the Assets and determine if it was feasible to acquire the Assets from Enbridge. The Special Committee retained independent technical, legal, tax and financial advisors, including BMO Capital Markets ("BMO") to provide a valuation of the Assets and a fairness opinion, which concluded that the consideration payable for the Assets is fair, from a financial point of view, to the Fund, ECT and the Company.

Based upon, among other things, its evaluation and advice from its advisors, the Special Committee negotiated the terms of the Transaction with Enbridge and recommended the board of trustees of ECT ("the ECT Board") approve the indirect acquisition by the Fund of the entities which own the Assets and the related transactions contemplated by the purchase and sale agreement. The ECT Board (with trustees who are also directors or officers of Enbridge abstaining) considered the recommendation of the Special Committee, the BMO valuation and fairness opinion, and the advice of the independent advisors retained by the Special Committee, and concluded that the Transaction is in the best interests of the Fund, ECT, and their respective unitholders (other than Enbridge) and unanimously approved the Transaction.

The board of directors of the Company (the "Board") then considered the Company's participation in the Transaction, the Special Committee recommendation, the ECT Board approval and the BMO valuation and fairness opinion. The Board (with directors who are also directors or officers of Enbridge abstaining) concluded that the Transaction is in the best interests of the Company and fair to the Company, and unanimously recommended approval of the Transaction by its shareholders.

Special Meeting of Shareholders

The Company will seek the approval of its shareholders excluding Enbridge and certain of its affiliates which are related parties or joint actors at a special meeting (the "Meeting") called to consider the Transaction, which will be held on December 7, 2012. Shareholders of record on November 8, 2012 will be entitled to attend and vote at the Meeting. Subject to receipt of regulatory and third party approvals, it is anticipated that the Transaction will close as soon as practicable following the requisite approval of the Transaction.

To assist shareholders in their assessment of the Transaction, the BMO valuation and fairness opinion, which were among a number of factors taken into consideration by the Board in recommending approval of the Transaction, will be summarized and published in the Management Information Circular ("Circular") to be mailed in respect of the Meeting. Shareholders are encouraged to carefully review and consider the Circular. The Circular, valuation and fairness opinion will be filed on SEDAR at www.sedar.com concurrent with the mailing of the materials for the Meeting.

Asset Profiles

Hardisty Contract Terminals
Location	-	Hardisty, Alberta, adjacent to Enbridge's Mainline System operational terminal and the junction of various regional receipt and export pipelines
Capacity	-	19 above ground tanks, approximately 7.5 million barrels of storage capacity
In Service	-	2009
Storage Contracts	-	Fully contracted take-or-pay contracts, with approximately 80% of revenue from fixed fee contracts, with remaining terms ranging from 17 to 24 years, the remainder of the revenue is derived from tank injection and pump out fees which are also stable.
Land Rights	-	Lands owned
Operator	-	Enbridge

Hardisty Storage Caverns
Location	-	Hardisty, Alberta, adjacent to the Hardisty Contract Terminals
Capacity	-	Four below ground storage caverns and two above ground buffer tanks, approximately 3.5 million barrels of storage capacity
In Service	-	2003
Storage Contracts	-	Fully contracted take-or-pay contracts with a remaining term of approximately 23 years, virtually all revenue is from fixed fee contracts.
Land Rights	-	Three caverns on owned lands, West cavern under lease which expires May 2, 2031
Operator	-	Enbridge

Greenwich Wind
Location	-	North shore of Lake Superior near Thunder Bay, Ontario
Capacity	-	98.9 MW
Technology (turbines)	-	43 Siemens Energy SWT 2.3-101
In Service	-	October 2011
Energy Purchaser	-	OPA (PPA)
PPA Term	-	20 years from In Service, terminating October 2031
Land Leases	-	25 year Crown lease expiring December 31, 2036 with 15 year renewal option
O&M Contract	-	5 year fixed price agreement with Siemens
Operator	-	Enbridge

Amherstburg Solar
Location	-	89 miles south of Sarnia, Ontario
Capacity (AC)	-	15 MW (10 MW and 5 MW facilities)
Technology	-	Cadmium telluride thin film PV modules (First Solar)
In Service	-	August 2011
Energy Purchaser	-	OPA (RESOP Agreements)
PPA Term	-	20 years from In Service, terminating August 15, 2031
Land Leases	-	25 year lease with option to renew for 4 further terms of 5 years
O&M Contract	-	First Solar - 10 year agreement with option to renew for a further 10 years
Operator	-	Enbridge

Tilbury Solar
Location	-	65 miles south of Sarnia, Ontario
Capacity (AC)	-	5 MW
Technology	-	Redeployed cadmium telluride thin film PV modules (First Solar), with 25 year annual energy output guarantee
In Service	-	December 22, 2010
Energy Purchaser	-	OPA (RESOP Agreement)
PPA Term	-	20 years from In Service, terminating December 20, 2030
Land Rights	-	Lands owned by Tilbury LP
O&M Contract	-	First Solar - 10 year agreement, with an option to renew for a further 15 years
Operator	-	Enbridge

ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.

Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, has an interest in high quality, low risk energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and interests in more than 400 megawatts of renewable and alternative power generation capacity in Alberta and Ontario. Information about Enbridge Income Fund Holdings Inc. is available on the Company's website at www.enbridgeincomefund.com.

FORWARD LOOKING INFORMATION

Certain information provided in this news release constitute forward-looking statements, and in particular, statements regarding the performance of the Fund, the performance of the Assets and the benefits of the Transaction. Forward looking statements are typically identified by words such as "contemplate", "anticipate", "expect", "project", "estimate", "forecast" and similar words suggesting future outcomes or statements regarding an outlook. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements and assumptions are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings. While the Company makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, including with respect to expected earnings and associated per share amounts, or estimated future dividends, may vary significantly from those expected. Readers are cautioned against placing undue reliance on forward-looking statements. Except as may be required by applicable securities laws, the Company assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

NON-GAAP MEASURES

This News Release contains references to the expected EBITDA to be generated by the crude oil storage and renewable energy assets. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Management believes that EBITDA is a useful supplemental measure as it provides an indication of the crude oil storage and renewable energy assets' operating results prior to consideration of how those activities may be financed or how the results may be taxed. This measure has been described in this document to provide shareholders and potential investors with additional information regarding the expected contribution of the crude oil storage and renewable energy assets to the Fund's operating results. EBITDA is not a measure that has standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The Subscription Receipts being offered have not been and will not be registered under the U.S. Securities Act of 1933 and state securities laws.