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Kinder Morgan Canada terminates C$5.5B credit agreement for Trans Mountain

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Kinder Morgan Canada terminates C$5.5B credit agreement for Trans Mountain

Kinder Morgan Canada Ltd. terminated its credit agreement with other Kinder Morgan Inc. subsidiaries and Royal Bank of Canada for C$5.5 billion of funds for the Trans Mountain pipeline expansion project after the Canadian government said it would acquire the pipeline system and expansion project.

Kinder Morgan Canada entered into the credit agreement with Kinder Morgan Cochin ULC, Trans Mountain Pipeline ULC and Royal Bank of Canada, as administrative agent, in June 2017. Kinder Morgan holds a 70% economic interest in the borrowers. About C$100 million of outstanding borrowings under the terminated agreement were refinanced, according to a June 1 SEC filing.

Kinder Morgan also canceled an equity nomination and support agreement connected to the credit agreement, in which the company had agreed to contribute equity to Kinder Morgan Cochin every time funds are drawn from the credit facility.

In late May, the Canadian government agreed to acquire the Trans Mountain oil sands pipeline system and expansion project from Kinder Morgan Canada for C$4.5 billion. The agreement included funding for the expansion project's planning and construction through a guarantee of expenditures under a recourse credit facility until deal closing.