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Kinder Morgan's debt financing syndication underway

by Lisa Ward  |  Published November 17, 2011 at 1:31 PM
Natural_Gas_Pipeline227x128.jpgThe debt syndication is under way for Kinder Morgan Inc.'s $37.8 billion acquisition of El Paso Corp., a source said. Barclays Capital committed to the entire $13.3 billion financing, with about $10.7 billion so far syndicated to other banks.

So far the process has gone smoothly, the source said.

Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank AG, Credit Suisse Group, J.P. Morgan Chase & Co., Royal Bank of Scotland plc, Wells Fargo & Co., UBS and Royal Bank of Canada each agreed to take on about $1.07 billion commitment. The debt package, which is considered investment grade, comprises a $6.8 billion, 364-day term loan; a $5 billion, three-year senior term loan; and a $1.5 billion senior revolver.

After a year the company will likely recapitalize its balance sheet and seek commercial paper and other alternate forms of financing, the source said. Kinder Morgan, a Houston pipeline operator, acquired El Paso on Oct. 17, creating the country's largest natural gas pipeline operator. The acquisition is expected to close in the second quarter of 2012.

Kinder Morgan, whose sponsors include Goldman Sachs Group Inc.'s buyout unit and Carlyle Group, is in the process of selling the E&P assets to help pay down debt it incurred to complete the acquisition.

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Tags: Bank of America Merrill Lynch | Bank of Tokyo-Mitsubishi UFJ | Barclays Capital | Carlyle Group | Citigroup Inc. | Credit Suisse Group | debt finance | debt package | debt syndication | Deutsche Bank AG | E&P | El Paso Corp. | Goldman Sachs Group Inc. | J.P. Morgan Chase & Co. | Kinder Morgan Inc. | natural gas | Royal Bank of Canada | Royal Bank of Scotland plc | UBS | Wells Fargo & Co.

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