Enbridge Energy Partners LP EEP announced that it has closed a public offering of $1.6 billion of senior unsecured notes. The offering comprised $500 million of notes due Oct 15, 2020; $500 million due Oct 15, 2025; and $600 million of notes due Oct 15, 2045.

Enbridge Partners intends to use the net proceeds from this offering to repay a portion of its outstanding commercial paper and fund a portion of its capital expansion projects. It also plans to fund the costs associated with unwinding certain interest hedging arrangements and for general partnership purposes.

The 2020 notes were issued at 99.464% of their principal amount and had a fixed-rate interest coupon of 4.375%. The 2025 notes were issued at 99.654% of their principal amount and had a fixed-rate interest coupon of 5.875%. The 2045 notes were issued at 98.665% of their principal amount and had a fixed-rate interest coupon of 7.375%. The settlement date for the offering was Oct 6, 2015.

Enbridge Energy Partners is a master limited partnership, engaged in the gathering, processing and transmission of natural gas and crude oil. Its principal crude oil system is the largest pipeline transporter of growing oil production from western Canada and the North Dakota Bakken formation. The system's deliveries to refining centers and connected carriers in the United States account for approximately 17% of total U.S. oil imports. Its natural gas gathering, treating, processing and transmission assets, which are principally located onshore in the active U.S. Mid-Continent and Gulf Coast areas, deliver approximately 2.2 billion cubic feet of natural gas daily.

However, Enbridge’s midstream natural gas business is sensitive to changes in natural gas supply, demand fundamentals and commodity cycles associated with gas processing margins. Furthermore, through the expansion of its natural gas gathering and processing business, Enbridge has increased its risk exposure to commodity prices.

Enbridge Energy Partners currently carries a Zacks Rank #3 (Hold). Investors interested in the oil and gas sector could try out better-ranked stocks like Cobalt International Energy, Inc. CIE, Matrix Service Company MTRX and ReneSola Ltd SOL. All these stocks sport a Zacks Rank #1 (Strong Buy).

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