Trans Mountain pipeline considers debt deal ahead of potential sale
The company reported that it had $25.3 billion debt as of March 31
Trans Mountain Corp. plans to borrow in the bond market to refinance some of its outstanding debt ahead of the Canadian government’s eventual sale of the oil pipeline operator, according to people familiar with the matter.
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The debt deal may still be months away from coming to the market, with size and structure yet to be set, said the people, who asked not to be identified discussing a private matter. The company hasn’t issued debt previously and does not currently have a credit rating.
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The company reported that it had $25.3 billion debt as of March 31. It has credit agreements with a syndicate of lenders containing two facilities totaling $19 billion, according to the report. The facilities mature in 2026 and include a guarantee from the government of Canada.
A spokesperson for Trans Mountain’s parent, Canada Development Investment Corp., declined to comment.
Trans Mountain’s expanded pipeline — which runs from Alberta to coastal water in British Columbia — began commercial operations in May after years of delays and cost overruns stemming from construction mishaps, legal battles and environmental opposition.
Prime Minister Justin Trudeau’s government bought the existing pipeline from a unit of Kinder Morgan Inc. in 2018 to ensure that the expansion would be built, and is expected to offload the asset now that it’s in operation. The project ended up costing $34 billion, more than six times the original estimate.
With assistance from Robert Tuttle
Bloomberg.com
