What is the primary purpose of these new credit facilities?

The primary purpose of the new revolving credit facilities is to provide Kinder Morgan with liquidity for working capital and other general corporate purposes, ensuring the company has access to funds for its ongoing operations and strategic initiatives.

How does this change impact KMI's existing debt structure?

This filing indicates that KMI replaced its existing $5 billion revolving credit facility with two new facilities: a larger 5-year facility with a higher potential borrowing capacity and a shorter-term 364-day facility. This suggests a refinancing or restructuring of short-to-medium term debt capacity, potentially offering more flexible terms or maturities.

Are there any significant financial restrictions or covenants associated with these new facilities?

Yes, the new facilities include a key financial covenant that limits the ratio of Consolidated Net Indebtedness to Consolidated EBITDA to 5.50 to 1.00. They also contain other standard covenants restricting actions such as incurring additional debt, granting liens, and making restricted payments, which are common for maintaining creditworthiness.

What is the significance of terminating the old credit agreement?

The termination of the existing credit agreement on November 16, 2018, is a direct result of entering into the new credit facilities. This is a normal procedure when a company establishes new borrowing arrangements, ensuring that only the most current and favorable agreements are in place.

KMI/EP-PC 8-K: Material Agreements & Financial Events

Summary

Kinder Morgan, Inc. (KMI) announced on November 20, 2018, the entry into new, material definitive agreements related to its credit facilities. Specifically, the Company entered into a $4.0 billion (with an option to increase to $5.0 billion) 5-year revolving credit facility and a $500.0 million 364-day revolving credit facility. These new facilities, also administered by Barclays, replace the Company's previous $5 billion revolving credit facility, which was terminated concurrently. Borrowings under the new facilities are intended for working capital and general corporate purposes. The new credit agreements include financial covenants, such as a maximum ratio of Consolidated Net Indebtedness to Consolidated EBITDA of 5.50 to 1.00, and various other restrictions common in such agreements, including limitations on incurring debt, granting liens, and making restricted payments under certain conditions. The establishment of these new credit facilities and termination of the old one is a routine financial management activity aimed at providing liquidity and maintaining financial flexibility.

Key Highlights

1Kinder Morgan entered into a new $4.0 billion (potentially up to $5.0 billion) 5-year revolving credit facility and a $500.0 million 364-day revolving credit facility, both maturing with Barclays as administrative agent.
2These new credit facilities replace and terminate the previous $5 billion revolving credit facility that was set to mature in 2019.
3The new facilities are intended to provide liquidity for working capital and general corporate purposes.
4Interest rates on the new facilities are based on LIBOR or an alternative benchmark rate, plus an applicable margin that varies with KMI's credit rating.
5The agreements include a financial covenant requiring a maximum ratio of Consolidated Net Indebtedness to Consolidated EBITDA of 5.50 to 1.00.
6The new facilities contain customary covenants and events of default, including restrictions on debt incurrence, liens, and restricted payments.
7The termination of the existing credit agreement was a direct consequence of entering into the new, more favorable or flexible, credit arrangements.

KINDER MORGAN, INC. 8-K Report, Material Agreement (Nov 21, 2018)

Summary

Key Highlights

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