Enbridge Inc.

Enbridge Inc.

September 22, 2014 17:10 ET

Enbridge to Transfer $1.76 Billion of Assets to Enbridge Income Fund

CALGARY, ALBERTA--(Marketwired - Sept. 22, 2014) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) has entered into an agreement with Enbridge Income Fund (the "Fund") to transfer a package of natural gas and diluent pipeline interests to the Fund for total consideration of $1.76 billion. The transfer is subject to receipt of customary regulatory approvals and is expected to close in November 2014.

Enbridge will receive on closing approximately $421 million in cash, $878 million in the form of a long term note payable by the Fund and bearing interest of 5.5 percent per annum, and $461 million in the form of preferred units of Enbridge Commercial Trust, a subsidiary of the Fund. The note is expected to be repaid by the Fund on an expedited basis through the issuance of lower cost public debt, as with the prior transfers completed in 2011 and 2012. The Fund will issue $421 million of trust units to Enbridge Income Fund Holdings (TSX:ENF) to fund the cash component of the consideration.

ENF has entered into a bought deal agreement with a group of underwriters for $336 million of subscription receipts exchangeable into ENF common shares on closing of the transaction. Enbridge has subscribed for $84 million of ENF common shares to maintain its interest in ENF at 19.9 percent. Enbridge's overall economic interest in the Fund will decrease slightly from 67.3 percent to 66.4 percent as a result of the transfer.

J. Richard Bird, Executive Vice President, Chief Financial Officer and Corporate Development commented, "This latest drop down transaction is consistent with our strategy of utilizing our sponsored vehicles as a significant source of low cost funding for our record growth capital program. The drop down will provide $1.2 billion of net funding to Enbridge, of which over $300 million is in the form of equity. At the same time we retain a significant indirect interest in these assets and will also benefit from the corresponding increase in our incentive distributions from the Fund. So the drop down puts us in a strong position on our overall equity funding plan and is also increasingly accretive over the term of our strategic plan compared with issuing Enbridge common equity. It is a larger transaction than our previous drop downs, reflecting the larger asset base and capitalization of the Fund and ENF, and in turn will contribute further to the Fund's scale and asset quality, positioning it as an even more effective funding alternative going forward."

About Enbridge Inc.

Enbridge Inc., a Canadian Company, is a North American leader in delivering energy and has been included on the Global 100 Most Sustainable Corporations in the World ranking for the past six years. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has a significant and growing involvement in natural gas gathering, transmission and midstream businesses, and an increasing involvement in power transmission. 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 more than 1,800 megawatts of renewable and alternative energy generating capacity and is expanding its interests in wind and solar energy and geothermal. Enbridge employs more than 10,000 people, primarily in Canada and the U.S. and is ranked as one of Canada's Top 100 Employers for 2014. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.

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