TC Energy Completes $7.9 Billion Notes Offering Success
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TC Energy Completes $7.9 Billion Notes Offering
TC Energy Corporation (TSX, NYSE: TRP) has announced the successful closure of a notes offering amounting to approximately $7.9 billion Canadian-dollar equivalent. This offering is directly related to the spinoff of TC Energy's Liquids Pipelines business. Establishing an independent, investment-grade debt capital structure attracted strong market interest, marking a significant milestone towards the completion of the spinoff transaction.
Details of the Notes Offering
The Notes Offering consists of an array of senior unsecured and junior subordinated notes. Specifically, it includes:
- US$700 million in 4.911% senior unsecured notes maturing in 2027,
- US$1,000 million in 5.026% senior unsecured notes maturing in 2029,
- US$1,250 million in 5.584% senior unsecured notes maturing in 2034,
- US$700 million in 6.176% senior unsecured notes maturing in 2054,
- C$450 million in 4.323% senior unsecured notes maturing in 2030,
- C$500 million in 4.616% senior unsecured notes maturing in 2032,
- C$500 million in 4.933% senior unsecured notes maturing in 2035,
- US$450 million in 7.625% junior subordinated notes maturing in 2055,
- US$650 million in 7.500% junior subordinated notes maturing in 2055.
This diverse offering illustrates the robust demand for South Bow Corporation's financing initiatives.
Escrow and Use of Proceeds
The net proceeds from this offering are currently being held in escrow pending the completion of the spinoff transaction. Once completed, these funds will be released to South Bow and will primarily be used to repay existing indebtedness to TC Energy and its subsidiaries. This transaction is expected to enhance South Bow's financial flexibility and positioning in the market.
Credit Facility Established for Future Growth
In addition to the Notes Offering, South Bow secured a C$2.0 billion revolving credit facility. This facility will become available upon the successful completion of the spinoff transaction. It is intended to support committed capital expenditures and provide liquidity to South Bow as it transitions to an independent entity.
Special Redemption Terms
The notes are subject to specific terms regarding their redemption or repurchase conditions. If the spinoff transaction is not concluded by March 31, 2025, or if South Bow decides to halt the spinoff process, mandatory redemption provisions will be enacted for the notes.
Upcoming Corporate Update
To provide more insights into its business development, South Bow is scheduled to host a corporate update via live broadcast. This event will occur shortly after the closing of the Notes Offering, providing an overview of South Bow's strategic priorities and future direction.
About South Bow Corporation
South Bow is poised to operate independently, with a significant focus on transporting crude oil via its extensive network of 4,900 kilometers of pipelines. The spinoff is expected to unlock the company's market potential, connecting Alberta's crude oil supplies directly to key U.S. refining markets. This strategic positioning is crucial for fulfilling North America's energy needs sustainably.
Commitment to Safety and Efficiency
As it transitions into a standalone entity, South Bow remains committed to providing safe and reliable transportation of crude oil. This transition represents a new chapter for South Bow, enhancing its competitive edge in the marketplace.
About TC Energy
TC Energy is a leading energy infrastructure company dedicated to powering North America. With a dedicated team of over 7,000 professionals, TC Energy is at the forefront of addressing complex energy challenges. The company is actively involved in delivering sustainable energy solutions while maintaining responsibilities to its communities and shareholders. Through its innovative strategies, TC Energy continues to deliver value to its investors and remain a pivotal player in the energy sector.
Frequently Asked Questions
What is the amount raised in the Notes Offering?
The Notes Offering raised approximately $7.9 billion Canadian-dollar equivalent.
Who is South Bow Corporation?
South Bow Corporation is a subsidiary of TC Energy focused on liquids pipelines, expected to operate independently soon.
What will the proceeds of the Notes Offering be used for?
The proceeds will be used to repay existing debts owed to TC Energy and bolster South Bow's capital structure.
When is the upcoming corporate update for South Bow?
The corporate update is set to be held shortly after the closing of the Notes Offering.
What is TC Energy's mission?
TC Energy aims to provide sustainable energy solutions while delivering significant value to its shareholders and communities.
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