Trans Mountain prepares to refinance debt prior to potential sale
Published by Elizabeth Corner,
Senior Editor
World Pipelines,
Trans Mountain Corporation, the operator of a major Canadian oil pipeline, is reportedly planning to enter the bond market to refinance a portion of its CAN$25.3 billion (US$18.4 billion) debt, reports Bloomberg, citing sources.
According to sources, details regarding the size and structure of the debt deal are still being finalised, with market introduction expected in the coming months.
Trans Mountain, which has not previously issued debt and lacks a credit rating, has existing credit agreements worth CAN$19 billion that are set to mature in 2026.
These agreements are backed by a guarantee from the Canadian Government.
A spokesperson for Canada Development Investment Corporation, the parent entity of Trans Mountain, declined to provide a comment on the matter.
The expanded Trans Mountain pipeline, which connects Alberta's oilsands to British Columbia's coast, has recently started commercial operations.
It followed a series of delays and budget escalations due to construction issues, legal challenges and environmental protests.
The Canadian Government, under Prime Minister Justin Trudeau, acquired the pipeline from Kinder Morgan to ensure the expansion project's completion.
With operations now under way, the government is expected to divest the asset.
Originally estimated at CAN$5.4 billion, the expansion project's costs escalated to CAN$34 billion.
The new pipeline runs parallel to the original 1953 Trans Mountain Pipeline and is designed to transport a mix of heavy and light crude oils over 980km of 36in and 42 in. diameter pipes.
The expansion utilises existing rights-of-way for nearly three-quarters of its route, with the remainder following other infrastructure or new paths.
This project is aimed at significantly enhancing Canada's crude oil export capacity to the west coast of the US and Asian markets.
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