Kinder Morgan Canada Ltd. completes $1.75B IPO, establishes $5.5B of credit facilities

On May 30, 2017, Kinder Morgan Canada Limited (KML) completed its initial public offering (the IPO) by issuing 102,942,000 restricted voting shares at a price of $17.00 per share, for total proceeds of approximately $1.75 billion. KML used the proceeds of the offering to acquire a 30-per-cent interest in Kinder Morgan Canada Limited Partnership (KMCLP), which holds the Canadian business of Houston-based Kinder Morgan, Inc. (KMI). KMI retained a 70-per-cent interest in the Canadian business through its ownership interest in KMCLP and all of the 242,058,000 special voting shares of KML, representing 70 per cent of the voting shares in KML. The IPO was completed through a syndicate of underwriters co-led and joint bookrun by TD Securities and RBC Capital Markets.

Additionally, on June 16, 2017, KML, indirectly through its affiliates, entered into definitive agreements establishing a $4-billion revolving construction credit facility for the purposes of funding the development, construction and completion of the Trans Mountain expansion project, a $1-billion revolving contingent credit facility for the purposes of funding, if necessary, additional Trans Mountain expansion project costs and a $500-million revolving working capital facility. The facility is available for general corporate purposes, including working capital.

KMI’s in-house legal team on the IPO and bank financing included David DeVeau, Adam Forman, Angela Teer, Melanie Blair and Nathan Zaseybida. KMI and KML were represented on the IPO by Blake, Cassels & Graydon LLP with a team that included Chad Schneider, Olga Kary, Jennifer Marshall and Kathleen Cloutier (securities), Carrie Aiken and Robert Kopstein (tax), and Mungo Hardwicke-Brown, Ky Kvisle, Keith Byblow, Todd McRae, Kevin Kerr and Garett Morin (corporate/energy). US legal assistance on the IPO was provided to KML by Weil, Gotshal & Manges LLP, with a team including Michael Aiello, Alexander Lynch and Alexander Horstmann, and to KMI by Troy Harder and Kathy Medford of Bracewell LLP.

The underwriters of the IPO were represented by Osler, Hoskin & Harcourt LLP, with a team including Frank Turner, Ed Tapuska, Desmond Lee, Jason Comerford, Daniel Zuniga and Lily Liu (securities), Jack Silverson (tax), and Martin Ignasiuk and Sander Duncanson (regulatory). Chris Cummings and Christian Kurtz of Paul, Weiss, Rifkind, Wharton & Garrison LLP provided US advice to the underwriters on the transaction.

Blake, Cassels & Graydon LLP assisted KML in implementing the credit facilities with a team consisting of Michael McIntosh, Andrew Kolody, James Desjardins and Rodney Perkins. The lenders under the credit facilities were represented by Torys LLP with a team which included Kevin Fougere, Jonathan Weisz, David Kolesar and Tyrel Henderson. Heather Brown and Jennifer Necas of Bracewell LLP provided US advice to Kinder Morgan on the banking matters.

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