The debate Thursday in investment banking circles is just how much equity the pipeline company needs.
In the wake of a successful $1-billion share sale last month from TranCanada and a $300-million offering on Tuesday from Fortis, Enbridge reported strong results on Wednesday - including a 12 per cent dividend boost and 6 per cent rise in 2009 earnings guidance.
At the same time, a company that's traditionally been a voracious consumer of capital announced it would be spending less in the coming year. Oil sands development is slowing, so Enbridge is moving back plans to build pipelines into properties such as Fort Hills, in northern Alberta.
Enbridge executives said in a conference call that they may only need to raise $200-million of equity in 2009. It should come as no great shock to hear the Street is urging Enbridge to raise more capital than needed. There's an old line in corporate finance: Raise money when it's offered, not when you need it. RBC Capital Markets put out a report Thursday that said "the company may still issue between $500 million and $1 billion of equity in 2009."
Just how much Enbridge raises, and when, will obviously depend on market conditions and the company's capital needs.
However, the window is now open to share sales by blue chip companies, as TransCanada, Foris, Manulife and TD Bank showed. That window was closed for much of this year, and could slam shut again if the economy worsens even more than expected. Watch for Enbridge to move sooner, rather than later.