11 November 2019 by jbchevrel
Enbridge Inc. (ENB) provides energy transportation and distribution services. They are operating one of the world's longest transportation systems (~200k miles pipelines). ENB also distributes nat gas, power, and other retail energy products. The group is the result of the merger of Enbridge with Spectra in 2017. The CDS is a member of CDX IG since s24. In this note, exceptionally, $ means CAD. Despite large capex, ENB’s credit profile has been supported by healthy cash flow from operations and asset sales. Indeed, with the ~$1.8b sale of Canada G&P (nat gas Gathering & Processing) business expected to close by the end of this year, ENB will have completed $8b of divestitures in total since their 2017 strategic plan. ENB reported solid Q3 earnings of $949m (from -$90m in Q318 unadj. ~$1.0b adj.). In particular, ENB reported an increased traffic in their key Mainline system between Canada and the US. ENB has during Q3 moved 2.71 mbd through it, up from 2.58 mbd in Q318. ENB’s consolidated leverage came stable at 4.6x so well within the [4.5x,5.0x[ official target range. ENB had a net FCF shortfall of $648m, mainly dragged by capital spending ($1.5b) and dividends ($1,7b). Adj. EBITDA came $3.1b, up from $2.9b in Q318, mainly thanks to the Liquids Pipelines arm ($1.8b from $1.6b in Q318) and despite softer Gas Transmission & Midstream arm ($944m from $1038m in Q318).