Long term debt issuances Q3 So I was looking through the Q3 financials and saw that in September ENB issued $1.1BUSD in debt with a maturity of 61 (yes you read that right) years. And the initial and reset rates look pretty damm onerous. What are these guys doing 1) issuing debt so far out and 2) at a time when interest rates are so high? Couldn't they have done this last year at much better terms? Or waited another year or two when the economy is in deep recession and the Fed was well into a rate reduction cycle? Or issued much shorter durations if they needed the cash near-term? I just don't get it.
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Issued: September 2022 7.38% fixed-to-fixed subordinated notes due January 2083 US$500 (Note 3)
3 For the initial five years, the notes carry a fixed interest rate. At year five, the interest rate will be set to equal to the Five-Year US Treasury rate plus a margin of 3.71%. At year 10, the interest rate will be reset to equal the Five-Year US Treasury rate plus a margin of 3.96%. Subsequent to year 10, every five years, the Five Year US Treasury rate is reset. At year 25, the interest rate will be reset to equal to the Five-Year US Treasury rate plus a margin of 4.71%.
Issued: September 2022 7.63% fixed-to-fixed subordinated notes due January 20834 US$600 (Note 4)
4 For the initial 10 years, the notes carry a fixed interest rate. At year 10, the interest rate will be reset to equal to the Five-Year US Treasury rate plus a margin of 4.42%. Subsequent to year 10, every five years, the Five-Year US Treasury rate will be reset. At year 30, the interest rate will be reset to equal to the Five-Year US Treasury rate plus a margin of 5.17%.