E Split Corp T.ENS

keep an eye on the Prefs

[Obscure1]

Middlefield raises money every time the Market price of the Unit exceeds the NAV of the Unit by a well defined percentage.

ENS investors have remained pretty disciplined but the Premium on the Prefs is getting out of hand.  The Prefs closed at $10.30 today while the NAV for the Prefs will be reported tomorrow at $10.02.  That is a Premium of $0.28

By my calculation, ENS is much closer to a Raise than virtually anyone here thinks.  An announcement by ENB of a Raise here that knocked the share price of ENB down by $2.00 would almost certainly trigger a Raise unless ENS shareholders dump ENS shares by a market appropriate amount the same day (which is very unlikely imo).

I bought a few more shares of ENS today at $11.03 but I won't be shy to sell if the need arises.  The math is so simple on this one.

[Experienced]

Obscure....thanks for the heads up. I don't own any ENS prefs but do own ENB prefs as I have mentioned before.  I added to those holdings  about three weeks ago and they are up 8.5% since then.. While I expect the SP of these prefs to go up further as interest rates decline over the next year, I think the recent move reflects anticipation of at least one rate cut later this year I

[Snowsnake]

Is it your thinking that if/when ENB announces a raise, the plan is to sell ENS, then after the share price has dropped, buy back, thereby lowering your average cost and increasing the return on your holdings? Even if this means selling at a loss, in order to buy back at a better SP? Just trying to make sure I understand what you are commenting.

[Obscure1]

One's cost base is irrelevent except for tax purposes.  If history repeats itself, ENB will raise money at a significant discount.  The $4 billion (+ $600k green shoe) was done at $44.70 on Mon Sept 5.  The share price ended up at $45.31 on Sept 6th, down $2.85 per share.  Meanwhile, ENB only fell $040 on the day when its NAV dropped $1.25.  Two days later, ENS

[Experienced]

Great post as usual Obscure... Let me offer some additional thought and considerations... ENB, in order to complete the acquisition of the utilities can raise the money three ways - pure debt, hybrid debt (prefs) and straight equity.  In their PRs they have kept their options open.  As I mentioned in an earlier post, I hold ENB prefs and they have gone up about 8.5% over the past three

[cttglvr]

Thanks Experienced. I hope you're right. I doubt they'll issue preferreds. I hope it's pure debt as a bond. DBRS just upgraded Enbridge to a PF 2 low. Am I correct in thinking this would help at least a bit to secure financing at a lower coupon? I totally agree on the preferreds. The P's bought in Sept are up 18.6% and the P's bought Apr 30 are up 6.7% as they seemed

[Experienced]

Ct......agreed How they proceed will depend on a decision made by the CFO looking at the capital structure of the company and discussions with their bankers and financial advisors regarding financing costs. lol....out of total self interest.....lol....I would prefer straight a equity issue as this would maximize a round trip of selling my prefs and buying ENS or ENB and reloading the prefs after