By Andrea Heisinger
New York, July 29 - Kinder Morgan Energy Partners, LP tapped Monday's market for $1.75 billion of senior notes (Baa2/BBB/BBB) in three tranches, an informed source said.
There was $800 million of 2.65% notes due 2019 sold at 99.858 to yield 2.678% with a spread of Treasuries plus 130 basis points. Initial guidance was in the 150 bps area.
There is a make-whole call at Treasuries plus 20 bps.
A $650 million tranche of 4.15% notes due 2024 priced at 99.706 to yield 4.185% with a spread of 160 bps over Treasuries. Talk was initially in the 170 bps area.
The notes have a make-whole call at 25 bps over Treasuries until Nov. 1, 2023, with a par call after that date.
Finally, there was a reopening of 5% bonds due March 1, 2043 to add $300 million. Pricing was at 94.855 to yield 5.348% with a spread of Treasuries plus 170 bps. There is a make-whole call at Treasuries plus 30 bps until Sept. 1, 2042, with a par call after that date.
The tranche was talked in the 185 bps area.
Total issuance for the bonds will be $700 million, including $400 million priced at Treasuries plus 185 bps on Feb. 21.
Active bookrunners were BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC.
Proceeds will be used to repay commercial paper and for general corporate purposes. Those purposes may include purchase of additional membership units of Copano and subsequent repurchase or redemption by Copano of a portion of outstanding 7.125% notes due 2021.
Kinder Morgan, a Houston-based pipeline, last priced bonds in a $1 billion offering in two parts on Feb. 21. That sale included 3.5% 10-year notes priced at 155 bps over Treasuries as well as the 5% 30-year bonds being reopened in Monday's sale.
| Issuer: | Kinder Morgan Energy Partners, LP
|
| Issue: | Senior notes
|
| Amount: | $1.75 billion
|
| Bookrunners: | BofA Merrill Lynch, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC
|
| Co-managers: | Credit Suisse Securities (USA) LLC, Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities (USA) Inc., Scotia Capital (USA) Inc.
|
| Trade date: | July 29
|
| Settlement date: | Aug. 5
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| Notes due 2019
|
| Amount: | $800 million
|
| Maturity: | Feb. 1, 2019
|
| Coupon: | 2.65%
|
| Price: | 99.858
|
| Yield: | 2.678%
|
| Spread: | Treasuries plus 130 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 150 bps area (initial)
|
|
|
| Notes due 2024
|
| Amount: | $650 million
|
| Maturity: | Feb. 1, 2024
|
| Coupon: | 4.15%
|
| Price: | 99.706
|
| Yield: | 4.185%
|
| Spread: | Treasuries plus 160 bps
|
| Call: | Make-whole at Treasuries plus 25 bps to Nov. 1, 2023, par call after
|
| Price talk: | 170 bps area (initial
|
|
|
| 30-year tap
|
| Amount: | $300 million, reopened
|
| Maturity: | March 1, 2043
|
| Coupon: | 5%
|
| Price: | 94.855
|
| Yield: | 5.348%
|
| Spread: | Treasuries plus 170 bps
|
| Call: | Make-whole at Treasuries plus 30 bps to Sept. 1, 2042
|
| Price talk: | 185 bps area (initial)
|
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