Kinder Morgan details $8.6 billion credit facility structure

By Sara Rosenberg

New York, Sept. 25 - Kinder Morgan Inc. outlined the structure on its proposed up to $8.6 billion credit facility to help fund its public-to-private transaction, according to an PREM14A filed Friday with the Securities and Exchange Commission.

The facility consists of an up to $5.6 billion seven-year term loan B, an up to $1.5 billion seven-year term loan C - which, if funded, will reduce the term loan B size dollar-for-dollar - a $2 billion three-year term loan D, of which an agreed portion will be made available to a Canadian subsidiary, and a $1 billion six-year revolver.

Goldman Sachs, Citigroup, Deutsche Bank, Wachovia and Merrill Lynch are joint bookrunners on the deal, with Goldman the left lead.

In addition, Goldman is co-lead arranger on all loan tranches, Citigroup is co-lead arranger for the term loan B, Deutsche is co-lead arranger for the term loan C, and Wachovia is the co-lead arranger on the term loan D and the revolver.

Furthermore, Citigroup is administrative agent, Goldman and Deutsche are co-syndication agents, and Wachovia and Merrill are co-documentation agents.

The credit facility contains a $1.5 billion accordion feature.

Under the acquisition, Richard D. Kinder, chairman and chief executive officer, and other members of management, including co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and investment partners Goldman Sachs Capital Partners, American International Group, Inc., The Carlyle Group and Riverstone Holdings LLC, will acquire all of the outstanding common stock of Kinder Morgan for $107.50 per share in cash.

All in all, the transaction valued at about $22 billion. This includes the assumption of about $7 billion of debt.

Total equity to be contributed by the sponsors, Richard Kinder and the other members of management or directors, either through cash or the contribution of rollover shares, is $7.9 billion.

The transaction is expected to be completed by early 2007, subject to receipt of stockholder approval and regulatory approvals, as well as the satisfaction of other customary closing conditions. The deal is not subject to financing.

Kinder Morgan is a Houston-based energy infrastructure provider.

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