Kinder Morgan, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Kinder Morgan, Inc. on November 16, 2018. The filing details the entry into new material definitive credit agreements and the simultaneous termination of an existing credit facility.
Key Financial Metrics and Debt Structure
The Company established two new revolving credit facilities (the "New Credit Facilities") with Barclays Bank PLC as the administrative agent:
- 5-Year Credit Facility: Provides up to $4.0 billion in borrowings, with an option to increase to $5.0 billion subject to conditions. Includes a $500.0 million sublimit for letters of credit. Matures five years from the closing date.
- 364-Day Credit Facility: Provides up to $500.0 million in borrowings. Matures 364 days from the closing date.
- Interest Rates: Calculated based on LIBOR plus a margin of 1.000% to 2.000% or a base rate (Federal Funds, Prime, or adjusted LIBOR) plus a margin of 0.100% to 1.000%, depending on the Company's credit rating.
- Covenants: Includes a maximum Consolidated Net Indebtedness to Consolidated EBITDA ratio of 5.50 to 1.00 for any four-fiscal-quarter period. Contains standard negative covenants regarding debt incurrence, liens, and restricted payments.
The filing text does not provide specific values for revenue, profit, cash flow, or current liquidity positions outside of the new credit facility limits.
Material Changes Versus Prior Period
The New Credit Facilities replaced the existing $5 billion revolving facility under the Credit Agreement dated September 19, 2014 (as amended). The existing facility was repaid and terminated on November 16, 2018. The new structure splits the capacity into a 5-year term and a 364-day term, whereas the prior agreement was a single revolving facility.
Guidance, Outlook, and Risks
Borrowings under the new facilities are designated for working capital and general corporate purposes. The agreement includes customary events of default, including non-payment, non-compliance with covenants, bankruptcy, and change of control. If an event of default occurs, lenders may terminate commitments and accelerate the maturity of outstanding obligations. Certain subsidiaries have executed guaranty agreements for the Company's obligations under these facilities.
Key Facts for Investor Verification
- Confirmation that the previous $5 billion credit facility was fully repaid and terminated on November 16, 2018.
- Verification of the Company's current credit rating to determine the applicable interest rate margin (1.000%–2.000% for LIBOR-based loans).
- Assessment of the Company's current Consolidated Net Indebtedness to Consolidated EBITDA ratio to ensure compliance with the 5.50 to 1.00 covenant.
- Review of the specific conditions required to increase the 5-Year Credit Facility from $4.0 billion to $5.0 billion.