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E Split Corp T.ENS

Alternate Symbol(s):  ENSPF | T.ENS.PR.A

The objective of the Class A shares is to provide holders with non-cumulative monthly cash distributions and the opportunity for capital appreciation through exposure to the portfolio. And The investment objectives for the preferred shares is to provide holders with fixed cumulative preferential quarterly cash distributions and return the original issue price of 10.00 Dollars to holders upon maturity. The Company has a portfolio comprised primarily of common shares of Enbridge Inc. Enbridge, a North American oil and gas pipeline, gas processing and natural gas distribution company the Enbridge Common Shares or the Portfolio and intends to purchase Enbridge Common Shares from time to time in the market or through participation in future public offerings by Enbridge. The Advisor believes that the Company offers investors an opportunity to gain exposure to Enbridge, one of the worlds largest energy infrastructure companies.


TSX:ENS - Post by User

Comment by Experiencedon Nov 13, 2024 8:45am
48 Views
Post# 36309902

RE:RE:RE:Heads up

RE:RE:RE:Heads upGanyman....guess I was a bit too technical in my post...my apologies

Basically, it would seem, based on Obscure's analysis that Middlefield's approach to writing options while never enough to cover the difference between the money coming in from ENB dividends and what ENS pays out (the differntial was in and around 3%) but they were able to cover the difference through overnight offerings.  Now, there appears to be evidence that that for various reasons (I suspect the big rally in the SP for ENB) that Middelfield lost money on their options strategy.  This resulted in Middlefield needed to establish the ATM and use it to sell ENS shares to get the necessary cash.  By having to sell ENS shares through the ATM they put enough selling pressure in a relatively illiquid market to create the current situation of a huge discount to NAV.

This essentially places Middlefield between a rock and a hatd place since they cannot use overnight offerings to balance their books and have to rely on the ATM.  Frankly, given the size of the ATM as outlined in the prospectus, I suspect that Middelfield expects to be using the ATM for the foreable future.  The way out, in part is for them to get better returns from their options strategy (as per my post) but this of course depends a lot on what happens to the ENB stock price.
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