Acquisition: Howard Midstream-backer AIMCo buys Canadian pipeline

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[Context: On May 28, Alberta Investment Management Corporation (AIMCo) announced the acquisition of an 85% interest in the Northern Courier Pipeline from TC Energy Corporation (TSX, NYSE: TRP). AIMCo is also an investor in Howard Midstream Partners, a US-based player actively expanding in the US and Mexico, that filed to go public in September 2017. Further details, advisors and related links are below.]


TC Energy expects to realize $1.15 billion from the partial monetization of Northern Courier Pipeline

CALGARY, Alberta, May 28, 2019 (GLOBE NEWSWIRE) — News Release – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy) announced today that it has entered into an agreement to sell an 85 per cent equity interest in Northern Courier Pipeline to Alberta Investment Management Corporation (AIMCo). In conjunction with the sale, TC Energy also expects that Northern Courier Pipeline will undertake a financing of long-term, non-recourse debt, the proceeds of which are expected to be fully distributed to TC Energy. Both transactions are expected to close in the third quarter of 2019, with the equity sale contingent on the debt financing and subject to closing adjustments along with customary regulatory approvals. The 90 km (56 mile) pipeline system transports bitumen and diluent between the Fort Hills mine site and Suncor Energy’s terminal located north of Fort McMurray, Alberta. The resulting aggregate gross proceeds to TC Energy are projected to be approximately $1.15 billion.

“The monetization of Northern Courier advances our ongoing efforts to prudently fund our industry-leading capital program while maximizing value for our shareholders,” said Russ Girling, TC Energy President and Chief Executive Officer. “Along with the sale of Coolidge, which recently closed, we now expect to realize approximately $1.75 billion of proceeds from announced portfolio management activities in 2019. When combined with our significant and growing cash flow, access to capital markets and potential additional portfolio management, we believe we are well-positioned to fund our $30 billion secured capital program in a manner consistent with achieving targeted leverage metrics in 2019 and thereafter,” added Girling.

Following the closing of the transactions, TC Energy will hold a 15 per cent aggregate interest in Northern Courier Pipeline and will account for the asset under the equity method in the company’s consolidated financial statements. TC Energy will remain the operator of the pipeline.

“We look forward to working with AIMCo as we realize the benefits of this partnership and financing opportunity,” concluded Girling.

RBC Capital Markets is acting as exclusive financial advisor to TC Energy and as Sole Bookrunner and Global Lead Agent on the debt issuance.

TC Energy delivers the energy millions of people rely on every day to power their lives and fuel industry. We are not only focused on what we do, but how we do it – guided by core values of safety, responsibility, collaboration and integrity, our more than 7,000 people are committed to sustainably developing and operating pipeline, power generation and energy storage facilities across Canada, the United States and Mexico. TC Energy’s common shares trade on the Toronto (TSX) and New York (NYSE) stock exchanges under the symbol TRP.

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