In December, the Fund completed a $500 million issue of medium term notes comprised of $275 million of 3.94%, 10-year notes and $225 million of 2.92%, 5-year notes. Proceeds of the offering were used to repay a 5% subordinated term loan that had been provided by Enbridge to partially fund the 2012 acquisition.
"The success of this offering clearly demonstrates the Fund's ability to access capital on attractive terms and the interest cost savings achieved with this refinancing further enhances the accretive nature of the acquisition we completed in December 2012," noted Mr. Whelen.
On February 11, 2013, the Company's Board of Directors declared a monthly cash dividend of $0.11125 per common share to be paid on March 15, 2013 to shareholders of record at the close of business on February 28, 2013. The dividend is designated an eligible dividend for Canadian tax purposes which qualifies for the enhanced dividend tax credit.
FOURTH QUARTER 2012 REVIEW
The audited financial statements and Management's Discussion and Analysis (MD&A) of both ENF and the Fund, which contain additional notes and disclosures, are available on the Company's website at www.enbridgeincomefund.com.
-- The Company's earnings for the fourth quarter and year ended December 31, 2012 were $16.6 million ($0.39 per common share) and $59.8 million ($1.48 per common share), respectively, compared with $16.8 million ($0.46 per common share) and $37.3 million ($1.33 per common share) for the fourth quarter and year ended December 31, 2011. Fourth quarter 2012 earnings reflected the Company's increased ownership in the Fund and a 11% per unit increase in the Fund's distribution.-- The Fund generated cash available for distribution for the three months and year ended December 31, 2012 of $43.8 million and $195.6 million, respectively. Fourth quarter 2012 CAFD was impacted by weak wind and solar resource at the Fund's Green Power facilities, higher maintenance capital expenditures within the Fund's Liquids Transportation and Storage business and higher Corporate costs incurred in connection with the 2012 Acquisition.-- In December 2012, the Fund completed the 2012 Acquisition for an aggregate price of $1.168 billion, inclusive of working capital adjustments. The assets acquired consist of above and below ground crude oil storage facilities at Hardisty, Alberta, the 99 MW Greenwich Wind Project near Thunder Bay, Ontario, and the 15 MW Amherstburg and 5 MW Tilbury Solar Projects in Southern Ontario.-- The Fund financed the 2012 Acquisition with a combination of debt and equity. Enbridge provided the Fund with a $582.0 million unsecured, subordinated pre-payable 10-year loan at a fixed interest rate of 5% per annum. The Fund issued 13,159,000 preferred units of ECT to Enbridge at a price of $23.15 per unit (gross proceeds of $304.6 million) and 11,982,000 trust units to the Company at a price of $23.15 per unit (gross proceeds of $277.4 million). To finance its increased investment in the Fund, the Company completed an offering of 9,597,000 subscription receipts (subsequently converted to common shares) at a price of $23.15 per unit and issued 2,385,000 common shares to Enbridge at price of $23.15 per common share for total proceeds of $277.4 million.-- In December 2012, the Fund also issued $275.0 million of 10-year medium term notes at a fixed interest rate of 3.94% and $225.0 million of 5- year medium term notes at a fixed interest rate of 2.92%. The proceeds from the issues and a draw of $82.0 million of the Fund's credit facility were used to repay the $582.0 million loan provided by Enbridge in connection with the 2012 Acquisition.-- The 145,000 barrels per day (bpd) Bakken Expansion Program is expected to be in service in the first quarter of 2013. Total costs of the Canadian portion of the project are currently expected to be $190 million. Firm take or pay commitments totaling 100,000 bpd have been received from anchor shippers, a portion of which are subject to a waiver of 25% of the take or pay amount in 2013. As a result of high crude oil differentials at markets serviced by downstream pipelines, capacity is not expected to be well utilized in 2013.-- The Company's Board of Directors declared monthly dividends of $0.103 per common share for each of October and November and $0.11125 per common share for December.
