Enbridge Completes $1.1 Billion Subordinated Notes Offering Due in 2057
Key Facts
Enbridge settled its offering of subordinated notes with an aggregate principal amount of $1.1 billion on November 13, split equally between two series due May 15, 2057, according to a company filing. Each series was valued at $550 million, making the offering long-term financing with more than one stated use. The company said in the offering prospectus that it expects net proceeds of about $1,086,900,000. The funds will be used to reduce outstanding debt, fund part of announced acquisitions, and for capital expenditures or general corporate purposes. The offering follows Enbridge’s announcement of third-quarter results and new projects and acquisitions on November 6.
The two series have different yield terms despite their equal size. Series A pays an initial annual interest rate of 6.700% through May 14, 2032, after which it resets to the yield on five-year U.S. Treasury securities plus 2.036%. Its rate will not fall below 6.700% after the reset. Series B pays 6.875% through May 14, 2037, after which its rate is linked to the five-year Treasury yield plus 2.007%. Series B’s rate will remain at least 6.875% after the reset, according to the issuance terms cited by Enbridge.
The notes’ terms give Enbridge the option to defer interest due on either series for up to five consecutive years at a time. The offering prospectus says deferred interest accrues and is subject to compounding. The deferral period also cannot extend beyond the notes’ 2057 maturity date. Interest is scheduled to be paid twice a year, on May 15 and November 15. The payment schedule begins on May 15, 2027, according to the company filing.
S&P Global Ratings assigned the notes an issue rating of “BBB-” on November 9, two notches below Enbridge’s “BBB+” long-term rating. The agency said it would treat the proposed issuance as including 50% equity when calculating adjusted credit ratios. The assessment gives part of the offering capital-like treatment for credit purposes, while the notes remain company obligations under their terms. In quarterly results released on November 6, Enbridge reported adjusted EBITDA of 4.434 billion Canadian dollars, compared with 4.267 billion Canadian dollars in the third quarter of 2025. The company reaffirmed its 2026 guidance range of 20.2 billion to 20.8 billion Canadian dollars.
Enbridge attributed the increase in adjusted earnings mainly to higher revenue related to transportation rate settlements on its East Tennessee Natural Gas and Texas Eastern Transmission systems. Higher rates and customer growth in its gas distribution business also contributed, partly offset by lower transportation volumes and pipeline tolls in its liquids business. The company reported a debt-to-adjusted EBITDA ratio of 5.1 times at the end of the third quarter. Its chief financial officer said foreign-exchange movements affected the reported ratio and that leverage would have remained within the target range after adjusting for currency effects. These figures provide financial context for the offering, part of whose proceeds the company said would go toward reducing outstanding debt.
In its quarterly update, Enbridge announced a 2.6 billion dollar acquisition of Tallgrass Energy’s crude oil business and the 0.3 billion dollar “Boney Express 2” growth project. It said its secured growth project backlog stood at 38 billion Canadian dollars, after bringing projects worth 3 billion Canadian dollars into service during the quarter. It also reaffirmed its medium-term compound annual growth guidance of about 5% for adjusted EBITDA, distributable cash flow per share and earnings per share. The company thus linked a stated use of the offering proceeds to partially funding announced acquisitions and capital expenditures, alongside its goal of reducing debt. The next interest payment is due on May 15, 2027, under the semiannual payment schedule.