Enbridge, Spectra Energy Partners Announce Elimination Of IDRs

(RTTNews) - Enbridge Inc.(ENB, ENB.TO) and Spectra Energy Partners LP (SEP) announced execution of a definitive agreement, resulting in Enbridge converting all of its incentive distribution rights or IDRs and general partner or GP economic interests in SEP into 172.5 million newly issued SEP common units.

As part of the transaction, all of the IDRs have been eliminated. The 172.5 million newly issued SEP common units have a value of approximately US$7.2 billion based on the volume-weighted average price of SEP common units over the past twenty days.

The transaction is expected to be breakeven to SEP's distributable cash flow per common unit by the second half of 2019 and be accretive thereafter.

Enbridge now holds a non-economic GP interest in SEP and owns approximately 403 million SEP common units, representing approximately 83% of SEP's outstanding common units.

The transaction provides significant benefits to all SEP common unitholders. The elimination of the IDRs will improve SEP's competitiveness and growth potential by permanently improving its cost of capital, thereby improving value for both SEP unitholders and Enbridge. The transaction also simplifies SEP's capital structure and further aligns the interests of all SEP unitholders.

SEP maintains its current guidance of 7% distribution growth in 2018 and 4-6% distribution growth in 2019-20.