Summary
Kinder Morgan, Inc. (KMI) has announced the entry into a new $3.5 billion revolving credit facility, which can be increased by up to $1.0 billion under certain conditions. This facility matures in five years and will be used for working capital and general corporate purposes. It also includes customary covenants, such as a maximum debt-to-EBITDA ratio of 5.50x, and provisions for replacing LIBOR with an alternative benchmark rate. This new facility enhances the company's liquidity and financial flexibility. In conjunction with the new credit facility, KMI has also amended its existing revolving credit agreement. The amendment reduces the borrowing capacity of the existing facility to $500.0 million, terminates its letter of credit commitments and swing line capacity, and also incorporates the LIBOR replacement provisions. These actions indicate a strategic shift in KMI's credit arrangements, consolidating and updating its financing structure.
Key Highlights
- 1KMI entered into a new $3.5 billion revolving credit facility with a potential increase of up to $1.0 billion.
- 2The new credit facility matures five years from the closing date of August 20, 2021.
- 3Proceeds from the new facility will be used for working capital and general corporate purposes.
- 4The facility includes a financial covenant limiting Consolidated Net Indebtedness to Consolidated EBITDA to 5.50 to 1.00.
- 5KMI amended its existing credit facility, reducing its capacity to $500 million and terminating letter of credit and swing line commitments.
- 6Both the new and amended credit facilities include provisions for replacing LIBOR with an alternative benchmark rate.
- 7Certain KMI subsidiaries are guarantors under the new credit facility.