Spectra to Drop Down Transmission, Storage Assets to Spectra Energy Partners

   By Nathalie Tadena 
 

Spectra Energy Corp. (SE) said it plans to drop down its remaining U.S. transmission and storage assets to Spectra Energy Partners (SEP) by the end of the year, a move that will allow both companies to increase their dividends.

Spectra Energy, which operates natural-gas pipelines and storage facilities in North America, said it expects to provide its investors with dividend growth of about 12 cents a year versus its current commitment of eight cents a year by completing the asset drop-down. The move will also allow Spectra Energy Partners to increase its quarterly distribution rate to a penny versus its current payout of three-quarters of a cent.

Like its peers, Spectra Energy has faced strong headwinds from low commodity prices, which weighed on its bottom line in recent quarters. Last month, the company reported its first-quarter earnings rose 2.1%, boosted by stronger distribution revenue though transmission revenue was down.

Spectra Energy shares were up 2.1% to $30.95 after hours Tuesday. The stock is up 11% since the start of the year.

Write to Nathalie Tadena at [e-mail]

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