Summary
Kinder Morgan, Inc. (KMI) filed an 8-K on August 9, 2017, detailing its successful offering of $1.25 billion in senior notes. This offering comprised $1 billion in 3.150% Senior Notes due 2023 and $250 million in Floating Rate Senior Notes due 2023. The proceeds are earmarked for specific debt reduction purposes, including paying down its term loan facility and redeeming the 5.50% senior notes due 2022 issued by its subsidiary, Hiland Partners Holdings LLC. This strategic move aims to manage KMI's debt profile and potentially lower its overall borrowing costs. Investors should note that the notes are guaranteed by a Cross Guarantee Agreement and were issued under a shelf registration statement. The offering was conducted through an underwriting agreement with major financial institutions, some of which have existing relationships with KMI as lenders and may benefit from the proceeds. The specific use of proceeds to retire existing debt, particularly the Hiland notes, signals a proactive approach to balance sheet management by KMI.
Key Highlights
- 1KMI successfully issued $1.25 billion in aggregate principal amount of senior notes on August 3, 2017.
- 2The offering included $1 billion of 3.150% Senior Notes due 2023 and $250 million of Floating Rate Senior Notes due 2023.
- 3Proceeds will be used to pay down KMI's term loan facility and redeem $250 million of Hiland Partners Holdings LLC 5.50% senior notes due 2022.
- 4The notes are guaranteed under a Cross Guarantee Agreement, providing additional security to noteholders.
- 5The issuance was made under a shelf registration statement, indicating pre-filed authorization for such offerings.
- 6The notes mature on January 15, 2023, with different interest payment schedules for fixed and floating rate notes.
- 7Underwriters and their affiliates are existing lenders and may benefit from the proceeds, a common practice in such offerings.