Summary
Kinder Morgan, Inc. (KMI) has filed an 8-K report to disclose the termination of a material definitive agreement, specifically a C$5.5 billion revolving credit facility. This termination is directly linked to the previously announced sale of the Trans Mountain Pipeline system and expansion project to the Government of Canada for C$4.5 billion. The company's approximately 70% economic interest in the borrowers under the terminated agreement means this event has significant implications for its financing structure and its exposure to the Trans Mountain assets. While the large credit facility was terminated, approximately C$100 million of outstanding borrowings were refinanced under a new C$500 million revolving credit facility entered into by Kinder Morgan Canada Limited (KMCU) for general corporate purposes. It is important for investors to note that KMI itself is not a party to this new credit agreement, underscoring the divestiture of the Trans Mountain assets and their associated financing arrangements. This filing primarily serves to formally report the contractual implications of the Trans Mountain sale.
Key Highlights
- 1Termination of a C$5.5 billion revolving credit facility due to the sale of the Trans Mountain Pipeline and expansion project.
- 2The sale of the Trans Mountain assets to the Government of Canada for C$4.5 billion is the underlying cause for the agreement termination.
- 3KMI held an approximate 70% economic interest in the borrowers under the terminated credit agreement.
- 4Outstanding borrowings of approximately C$100 million under the terminated agreement have been refinanced.
- 5A new C$500 million revolving credit facility has been established for KMCU for general corporate purposes, effective May 30, 2018.
- 6KMI is not a party to the new C$500 million credit agreement, indicating a separation from the financing of former Trans Mountain-related entities.