When it comes to doling out underwriting fees, the Enbridge family of companies takes a socialist approach.
Rather than designating one or two investment banks as its lead underwriters for every single financing, Enbridge spreads the wealth. In the past six months, companies under the Enbridge corporate banner have come to equity markets five times and the debt market once, and every single time the lead underwriters have been switched up.
The shuffling has a big effect on league tables. Since November Enbridge companies have raised a whopping $1.6-billion in new equity, plus $500-million in debt. If all that underwriting activity went to the same two banks, they'd be sitting pretty right now – the same way TD benefits whenever a Dundee family company comes to market.
For the latest $500-million common share issue, Enbridge tapped RBC Dominion Securities and Scotia Capital as its lead underwriters. A month ago the company raised $400-million by issuing preferred shares and spread the love across four different banks. Back in February, CIBC World Markets got to share the honours with RBC when Enbridge Income Fund Holdings raised just shy of $100-million.
The recent flurry of financings isn't anything new. Enbridge has raised eye-popping amounts of money over the past 18 months. By the end of November 2012, the company had already raised $2.5-billion during the year, and there's been more than a billion dollars raised since.
Much of this has been well telegraphed. On quarterly conference calls management has repeatedly said there is big capital spending ahead, and in November analyst Paul Lechem at CIBC World Markets noted that the company had another $10-billion of "highly probable" unsecured projects that it was looking to launch.
On Thursday Enbridge updated investors on its spending plans and noted that it will actually need to raise more money than it forecasted last fall. After the latest common share offering, the company still needs to finance another $1.9-billion through 2016.
(Tim Kiladze is a Globe and Mail Reporter.)
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