The Globe and Mail reports in its Tuesday edition that Kinder Morgan bills its
$44-billion (U.S.) restructuring
as a way to simplify its business
and cut its cost of capital by
putting all its subsidiaries under a
single umbrella. The Globe's Jeffrey Jones writes Canada's major pipeline companies, however,
are not likely to follow suit any time soon.
Enbridge uses its United States affiliate,
Enbridge Energy Partners LP (EEP),
as an alternative funding vehicle
as it pursues about $37-billion
(Canadian) of commercially
secured growth projects. First
Energy Capital analyst Steven
Paget notes
Enbridge recently restructured
the 34-per-cent-owned unit to
reduce its cost of capital.
EEP's dividend yield is 2.5 per
cent higher than the parent company's,
meaning Enbridge
would have to shell out plenty of
cash for its subsidiary or offer its
own shares, which would spell a
dividend cut for those with EEP
units.
Mr. Paget says, "Also, that would be asking people
now getting paid in U.S. dollars
to either get some sort of
more complicated thing or getting
paid in Canadian dollars, and
I'm not sure they would like that."
Enbridge also owns 19.9 per
cent of the Enbridge Income
Fund.
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