Enbridge Income Fund Enters Into $1.76 Billion Transaction With Enbridge Inc. for Natural Gas and Diluent Pipeline Interests

CALGARY, ALBERTA--(Marketwired - Sept. 22, 2014) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRE SERVICES

Enbridge Income Fund Holdings Inc. (the "Company") (TSX:ENF) and Enbridge Income Fund (the "Fund") announced today that indirect wholly-owned subsidiaries of the Fund have entered into agreements with indirect wholly-owned subsidiaries of Enbridge Inc. (TSX:ENB) (NYSE:ENB) ("Enbridge") to acquire a 50 percent interest in the U.S. segment of the Alliance Pipeline and subscribe for and purchase Class A Units which will provide a defined cash flow stream from the Southern Lights Pipeline (collectively, the "Assets"), for $1.76 billion (the "Transaction"). The Company also announced that to finance its equity investment in the Fund pursuant to the Transaction, it has entered into a bought deal agreement with Scotiabank, RBC Capital Markets and TD Securities Inc. for the sale of an aggregate of 11,100,000 subscription receipts of the Company ("Subscription Receipts") at a price of $30.35 per Subscription Receipt, for gross proceeds of $337 million. Closing of the Transaction is subject to customary regulatory approval, including pursuant to competition legislation in Canada and the U.S. The Company anticipates that the Transaction will be completed in November 2014.

Collectively, the Assets are expected to generate within the Fund cash flow before interest expense of approximately $150 million per year on average over a long term planning horizon. The Company intends to increase the dividend on its common shares ("Common Shares") by 12 percent following close of the Transaction.

"This immediately accretive acquisition creates a tremendous opportunity for the Fund to continue delivering on its value proposition of long term, stable and growing cash flows underpinned by businesses with strong fundamentals," noted Perry Schuldhaus, President of the Company. "We believe that the acquisition of the U.S. segment of the Alliance Pipeline and the cash flows from the Southern Lights Pipeline will be a great fit for the Fund and is expected to deliver numerous benefits. The Assets will substantially scale up and further diversify the Fund's sources of low risk cash flow. After giving effect to the Transaction, the distributable cash flow generated from the Natural Gas Transmission and Crude Oil Transportation and Storage segments are expected to increase to approximately 25 percent and 46 percent, respectively, over a long term planning horizon. Expected additional cash flow accretion will also enable the Fund to build cash resources to support investment in further growth. Both Assets offer opportunities to participate in future growth of the Assets, which is supported by strong fundamentals within each of the businesses."