TC Energy announces South Bow’s closing of $7.9 billion Notes Offering for Liquids Pipelines spinoff
TC Energy (TSX, NYSE: TRP) announced that South Bow has closed a $7.9 billion Canadian-dollar equivalent notes offering related to the spinoff of TC Energy's Liquids Pipelines business. The offering includes various senior unsecured notes and junior subordinated notes with maturities ranging from 2027 to 2055. This debt structure establishment is a key milestone for the spinoff transaction, which is expected to close in early Q4 2024.
Additionally, South Bow has established a C$2.0 billion four-year senior unsecured revolving credit facility. The notes were offered to qualified institutional buyers in the U.S. and accredited investors in Canada. South Bow will host a virtual corporate update on September 9, 2024, to provide an overview of its business and strategic priorities.
TC Energy (TSX, NYSE: TRP) ha annunciato che South Bow ha chiuso un'offerta di note pari a 7,9 miliardi di dollari canadesi in relazione allo scorporo del business delle pipeline di liquidi di TC Energy. L'offerta include varie note senior non garantite e note subordinate junior con scadenze che vanno dal 2027 al 2055. Questa struttura di debito rappresenta una tappa fondamentale per la transazione di scorporo, che ci si aspetta si concluda all'inizio del Q4 2024.
Inoltre, South Bow ha istituito una linea di credito revolving senior non garantita di C$2,0 miliardi con scadenza di quattro anni. Le note sono state offerte a compratori istituzionali qualificati negli Stati Uniti e a investitori accreditati in Canada. South Bow organizzerà un aggiornamento aziendale virtuale il 9 settembre 2024 per fornire una panoramica della sua attività e delle priorità strategiche.
TC Energy (TSX, NYSE: TRP) anunció que South Bow ha cerrado una oferta de notas equivalente a 7.9 mil millones de dólares canadienses relacionada con la escisión del negocio de Oleoductos de TC Energy. La oferta incluye varias notas senior no garantizadas y notas subordinadas junior con vencimientos que van desde 2027 hasta 2055. Esta estructura de deuda es un hito clave para la transacción de escisión, que se espera cierre a principios del Q4 2024.
Además, South Bow ha establecido una línea de crédito revolving senior no garantizada por C$2.0 mil millones a cuatro años. Las notas fueron ofrecidas a compradores institucionales calificados en EE. UU. y a inversores acreditados en Canadá. South Bow llevará a cabo una actualización corporativa virtual el 9 de septiembre de 2024 para proporcionar una visión general de su negocio y prioridades estratégicas.
TC 에너지 (TSX, NYSE: TRP)가 South Bow가 TC 에너지의 액체 파이프라인 사업 분할과 관련하여 79억 캐나다 달러 상당의 노트 공모를 마쳤다고 발표했습니다. 이 공모에는 2027년부터 2055년까지의 만기를 가진 다양한 비담보 선순위 노트와 후순위 노트가 포함됩니다. 이 부채 구조의 설정은 분할 거래의 중요한 이정표로, 2024년 4분기 초에 완료될 것으로 예상됩니다.
또한, South Bow는 C$20억의 4년 만기 비담보 선순회 신용공여를 설정했습니다. 이 노트는 미국의 자격을 갖춘 기관 투자자와 캐나다의 인증된 투자자에게 제공되었습니다. South Bow는 2024년 9월 9일에 가상 기업 업데이트를 개최하여 사업과 전략적 우선순위에 대한 개요를 제공할 것입니다.
TC Energy (TSX, NYSE: TRP) a annoncé que South Bow a clôturé une offre d'obligations équivalente à 7,9 milliards de dollars canadiens, liée à la scission de l'activité Pipelines Liquides de TC Energy. L'offre comprend diverses obligations senior non garanties et obligations subordonnées juniors avec des échéances allant de 2027 à 2055. Cette structure de dette représente une étape clé pour la transaction de scission, qui devrait se conclure début Q4 2024.
De plus, South Bow a mis en place une ligne de crédit revolving senior non garantie de C$2,0 milliards sur quatre ans. Les obligations ont été offertes aux acheteurs institutionnels qualifiés aux États-Unis et aux investisseurs accrédités au Canada. South Bow organisera une mise à jour virtuelle de l'entreprise le 9 septembre 2024 pour fournir un aperçu de ses activités et de ses priorités stratégiques.
TC Energy (TSX, NYSE: TRP) gab bekannt, dass South Bow eine Anleiheofferte in Höhe von 7,9 Milliarden kanadischen Dollar im Zusammenhang mit der Abspaltung des Flüssigpipeline-Geschäfts von TC Energy abgeschlossen hat. Das Angebot umfasst verschiedene unbesicherte Senior Notes und nachrangige Anleihen mit Laufzeiten von 2027 bis 2055. Diese Struktur der Schulden ist ein wichtiger Meilenstein für die Abspaltungstransaktion, die voraussichtlich Anfang Q4 2024 abgeschlossen wird.
Darüber hinaus hat South Bow eine unbesicherte revolvierende Kreditlinie über C$2,0 Milliarden mit einer Laufzeit von vier Jahren eingerichtet. Die Anleihen wurden an qualifizierte institutionelle Käufer in den USA und an akkreditierte Investoren in Kanada angeboten. South Bow wird am 9. September 2024 ein virtuelles Unternehmensupdate veranstalten, um einen Überblick über sein Geschäft und strategische Prioritäten zu geben.
- Successful closure of a $7.9 billion notes offering, indicating strong market interest
- Establishment of a C$2.0 billion revolving credit facility for future liquidity
- Spinoff transaction on track to close in early Q4 2024
- Creation of an independent, investment-grade debt capital structure for South Bow
- Significant debt issuance may increase interest expenses for South Bow
- Potential risks associated with the special mandatory redemption of notes if the spinoff doesn't occur by March 31, 2025
Insights
The $7.9 billion notes offering by South Bow marks a significant milestone in TC Energy's planned spinoff of its Liquids Pipelines business. This substantial debt issuance, comprising various tranches with maturities ranging from 2027 to 2055, demonstrates strong market confidence in the new entity. The investment-grade debt structure and the additional
The diverse maturity profile and mix of USD and CAD denominated notes suggest a well-structured approach to managing interest rate and currency risks. With interest rates ranging from
TC Energy's decision to spinoff its Liquids Pipelines business into South Bow represents a strategic move to unlock shareholder value. This transaction allows each entity to focus on its core competencies and potentially achieve higher valuation multiples. The successful debt offering is important for establishing South Bow as an independent, financially robust entity.
The inclusion of junior subordinated notes in the debt structure provides additional financial flexibility while maintaining an investment-grade profile. The special mandatory redemption clause for the notes offers investor protection, ensuring funds will be returned if the spinoff doesn't materialize. This demonstrates TC Energy's commitment to the transaction and confidence in its completion. The upcoming corporate update on September 9th will be pivotal for investors to understand South Bow's strategic direction and growth prospects post-spinoff.
The spinoff of TC Energy's Liquids Pipelines business into South Bow reflects the ongoing trend of energy companies optimizing their asset portfolios. This move allows TC Energy to focus on its natural gas infrastructure while creating a pure-play liquids pipeline company in South Bow. The strong investor interest in the notes offering suggests confidence in the long-term viability of oil transportation infrastructure, despite the global push towards renewable energy.
The C$2.0 billion revolving credit facility provides South Bow with ample liquidity for capital expenditures, important for maintaining and expanding its pipeline network. This financial flexibility is essential in an industry that requires significant ongoing investment. The successful debt raise also indicates that investors view pipeline assets as relatively stable, long-term investments, even in a changing energy landscape. South Bow's ability to secure this funding positions it well to capitalize on potential growth opportunities in the North American oil transportation market.
CALGARY, Alberta, Aug. 28, 2024 (GLOBE NEWSWIRE) -- News Release — TC Energy Corporation (TSX, NYSE: TRP) (TC Energy) announced today that South Bow Corporation (South Bow) has closed a notes offering of approximately
- US
$700 million in aggregate principal amount of 4.911 per cent senior unsecured notes that will mature on Sept. 1, 2027 (the 2027 Notes); US$1,000 million in aggregate principal amount of 5.026 per cent senior unsecured notes that will mature on Oct. 1, 2029 (the 2029 Notes); US$1,250 million in aggregate principal amount of 5.584 per cent senior unsecured notes that will mature on Oct. 1, 2034 (the 2034 Notes); and US$700 million in aggregate principal amount of 6.176 per cent senior unsecured notes that will mature on Oct. 1, 2054 (the 2054 Notes). - C
$450 million in aggregate principal amount of 4.323 per cent senior unsecured notes that will mature on Feb. 1, 2030 (the 2030 Notes); C$500 million in aggregate principal amount of 4.616 per cent senior unsecured notes that will mature on Feb. 1, 2032 (the 2032 Notes); and C$500 million in aggregate principal amount of 4.933 per cent senior unsecured notes that will mature on Feb. 1, 2035 (the 2035 Notes). - US
$450 million in aggregate principal amount of 7.625 per cent junior subordinated notes that will mature on March 1, 2055 (the Series 1 Notes) and US$650 million in aggregate principal amount of 7.500 per cent junior subordinated notes that will mature on March 1, 2055 (the Series 2 Notes and, together with the 2027 Notes, the 2029 Notes, the 2030 Notes, the 2032 Notes, the 2034 Notes, the 2035 Notes, the 2054 Notes, and the Series 1 Notes, the Notes).
The Notes were issued by South Bow Canadian Infrastructure Holdings Ltd. and 6297782 LLC, which will, upon completion of the spinoff Transaction, be wholly owned subsidiaries of South Bow.
The net proceeds of the Notes Offering were placed into escrow pending the completion of the spinoff Transaction. Upon completion of the spinoff Transaction, the escrowed funds will be released to South Bow and used to repay indebtedness owed by South Bow and its subsidiaries to TC Energy and its subsidiaries. Separately, South Bow established a C
The Notes will be subject to a special mandatory redemption or repurchase, as applicable, if (i) the spinoff Transaction is not consummated on or prior to March 31, 2025, or (ii) South Bow delivers notice to the escrow agent and the trustee for the Notes prior to such date advising that it is no longer pursuing the consummation of the spinoff Transaction, as further described in the terms of the Notes.
The Notes and the related guarantees have not been registered under the Securities Act of 1933, as amended (the Securities Act) or any state securities laws and were offered in reliance upon exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes and the guarantees thereof were offered and sold in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-US persons outside the United States in reliance on Regulation S under the Securities Act. The Notes were offered and sold in Canada on a private placement basis to "accredited investors" pursuant to exemptions from the prospectus requirements of applicable Canadian securities laws. The Notes have not been and will not be qualified for distribution to the public under applicable Canadian securities laws.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation, or sale would be unlawful.
South Bow Virtual Corporate Update
South Bow will host a corporate update via live broadcast on Monday, Sept. 9, 2024, beginning at 8 a.m. (MDT) / 10 a.m. (EDT), where members of South Bow's management team and intended board of directors will provide an overview of South Bow's business and strategic priorities.
The presentation can be accessed directly at https://my.400.lumiconnect.com/r/participant/live-meeting/400-357-322-809, or on South Bow's website at www.southbow.com/investors. The presentation will be archived and accessible for replay following the live event.
About South Bow
South Bow, which is expected to be a standalone company early in the fourth quarter of 2024, safely operates 4,900 kilometres (3,045 miles) of crude oil pipeline infrastructure. TC Energy shareholders approved the spinoff Transaction in June 2024. The spinoff Transaction is expected to unlock South Bow's unrivalled market position, connecting Alberta crude oil supplies to US refining markets in Illinois, Oklahoma, and the US Gulf Coast. We take pride in what we do – providing safe and reliable transportation to North America's highest demand markets. To learn more, visit us at www.SouthBow.com.
About TC Energy
We're a team of 7,000+ energy problem solvers working to move, generate and store the energy North America relies on. Today, we're delivering solutions to the world's toughest energy challenges – from innovating to deliver the natural gas that feeds LNG to global markets, to working to reduce emissions from our assets, to partnering with our neighbours, customers and governments to build the energy system of the future. It's all part of how we continue to deliver sustainable returns for our investors and create value for communities.
TC Energy's common shares trade on the Toronto (TSX) and New York (NYSE) stock exchanges under the symbol TRP. To learn more, visit us at www.TCEnergy.com.
Forward-looking Information
This release contains certain information that is forward-looking and is subject to important risks and uncertainties and is based on certain key assumptions. Forward-looking statements are usually accompanied by words such as "anticipate", "expect", "believe", "may", "will", "should", "estimate", or other similar words. Forward-looking statements in this document may include, but are not limited to, statements on expectations with respect to: the Notes Offering, including the use of the net proceeds therefrom; the Facility, including the uses and benefits thereof; the spinoff Transaction, including the timing thereof; and TC Energy and South Bow following the completion of the spinoff Transaction. Forward-looking statements in this document are intended to provide TC Energy security holders and potential investors with information regarding TC Energy, South Bow and their respective subsidiaries, including management's assessment of TC Energy's, South Bow's and their respective subsidiaries' future plans and financial outlook. All forward-looking statements reflect TC Energy's beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. As actual results could vary significantly from the forward-looking information, readers should not put undue reliance on forward-looking information. TC Energy does not update its forward-looking information due to new information or future events, unless required to by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to the most recent Quarterly Report to Shareholders and the 2023 Annual Report filed under TC Energy's profile on SEDAR+ at www.sedarplus.ca and with the US Securities and Exchange Commission at www.sec.gov.
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Media Inquiries:
Media Relations
media@tcenergy.com
403-920-7859 or 800-608-7859
Investor & Analyst Inquiries:
Gavin Wylie / Hunter Mau
investor_relations@tcenergy.com
403-920-7911 or 800-361-6522
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FAQ
What is the total value of the notes offering closed by South Bow for TC Energy's (TRP) Liquids Pipelines spinoff?
When is the expected closing date for TC Energy's (TRP) Liquids Pipelines spinoff transaction?
What additional credit facility has South Bow established as part of TC Energy's (TRP) spinoff process?
When will South Bow host a virtual corporate update following TC Energy's (TRP) spinoff announcement?
