CALGARY – Pipeline giant Enbridge Inc. (TSX:ENB) has announced an agreement to raise $2 billion by selling its own shares, the proceeds of which will go toward paying down short-term debt.
Enbridge and a group of Canadian and U.S. banks have agreed to issue 49.14 million shares on a bought-deal basis.
In a bought deal, banks team up to buy a chunk of stock from a company, usually at a discount.
The banks, or “underwriters,” are then responsible for selling those shares to investors.
Enbridge’s agreement is with RBC Capital Markets, Credit Suisse, BMO Capital Markets, CIBC World Markets, Scotiabank and TD Securities.
In the bought deal announced Wednesday, the shares are being issued at $40.70 apiece.
Enbridge shares closed at $43.16 on the Toronto Stock Exchange on Wednesday.
The offering is expected to close on or around March 1.
Enbridge said the offering should be enough to fulfil equity funding requirements for its commercially secured growth program through the end of 2017.