KINDER MORGAN, INC. current report, 24 February 2020

Business Context and Reporting Period

This Form 8-K filing by Kinder Morgan, Inc. (KMI) reports a corporate event dated February 24, 2020. The filing details a debt issuance by Tennessee Gas Pipeline Company, L.L.C. (TGP), an indirect, wholly owned subsidiary of KMI.

Key Financial Metrics

  • Debt Issuance: $1,000,000,000 aggregate principal amount of 2.900% Senior Notes due 2030.
  • Interest Rate: 2.900% per annum.
  • Maturity Date: March 1, 2030.
  • Interest Payment Schedule: Semi-annually in arrears on March 1 and September 1, commencing September 1, 2020.
  • Guarantees: The Notes are guaranteed by KMI and substantially all of its wholly owned U.S. subsidiaries.
  • Revenue, Profit, and Cash Flow: The filing text does not provide a clear value for these metrics as this is a transaction-specific report, not a periodic financial statement.

Material Changes and Use of Proceeds

The primary material change is the addition of $1 billion in long-term debt to the subsidiary's capital structure. TGP intends to use the proceeds from the offering to:

  • Repay intercompany indebtedness owed to KMI (which TGP previously incurred to repay debt maturing in 2016 and 2017).
  • Fund general corporate purposes.

Outlook, Risks, and Contingencies

  • Redemption Rights: TGP may redeem all or part of the Notes at any time at applicable redemption prices.
  • Default Risks: Upon an event of default (including payment defaults, covenant breaches, or bankruptcy), the entire principal amount may be accelerated and become immediately due.
  • Related Party Transactions: Initial purchasers and their related entities have engaged in commercial and investment banking transactions with KMI and may continue to do so, receiving customary compensation.

Investor Verification Checklist

  • Verify the specific terms of the Cross Guarantee Agreement filed as Exhibit 10.15 to KMI's 2019 Form 10-K.
  • Confirm the exact amount of intercompany indebtedness being repaid with the new proceeds.
  • Review the "applicable redemption prices" for the Notes to understand potential early repayment costs.
  • Assess the impact of the new 2.900% interest obligation on TGP's and KMI's overall leverage ratios.