Kinder Morgan plans to pay down debt via $2 billion of sale proceeds

By Wendy Van Sickle

Columbus, Ohio, Sept. 6 – Kinder Morgan Inc. plans to use about $2 billion of proceeds from the sale of Trans Mountain to pay down debt, according to a press release.

As a result, the company expects to end the year at a net debt-to-adjusted EBITDA ratio of about 4.6 times and expects to have reduced its consolidated net debt by about $7.8 billion since the third quarter of 2015.

“Today, we are revising our long-term leverage target from at or below 5 times to around 4.5 times, which is consistent with where we expect to end the year,” Kinder Morgan president Kim Dang said in the release. “We have been very successful over the last several years in substantially improving our balance sheet to enhance our financial strength, and we expect that to be recognized by the ratings agencies.”

Kinder Morgan subsidiary Kinder Morgan Canada Ltd. indirectly sold the Trans Mountain Pipeline system and the Trans Mountain Expansion Project to the Canadian government for $4.5 billion in cash.

Kinder Morgan is a Houston-based pipeline transportation and energy storage company.

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