NGPL PipeCo LLC Announces Successful Receipt of Requisite Consents Related to Consent Solicitations with Respect to its 4.875% Senior Notes due 2027 and 3.250% Senior Notes due 2031

Rhea-AI Summary

NGPL PipeCo has successfully received required consents from holders of its 4.875% Senior Notes due 2027 and 3.250% Senior Notes due 2031 for amendments to their respective indentures. The consent solicitations are linked to a previously announced transaction where Brookfield Infrastructure will sell its 25% stake in NGPL Holdings to ArcLight Capital Partners funds.

Following the transaction closure expected in Q2 2025, ArcLight funds and Kinder Morgan (NYSE: KMI) will each control 50% of board member elections, with ArcLight holding a 62.5% economic interest and Kinder Morgan maintaining a 37.5% stake. Kinder Morgan will continue operating the pipeline assets. The amendments modify the 'Change of Control' definition to ensure the transaction won't trigger such provisions in the indentures.

Positive

• Equal board control (50/50) maintained between KMI and ArcLight ensures balanced governance
• KMI continues operating pipeline assets, maintaining operational stability
• Successful consent solicitation removes potential change of control complications

Negative

• KMI's economic interest reduces to 37.5% from previous higher stake

Insights

Corporate Finance Expert

This bond consent solicitation marks a significant step in the restructuring of NGPL Holdings' ownership, with important implications for Kinder Morgan (KMI). The successful amendment to the "Change of Control" provisions for NGPL PipeCo's senior notes clears a crucial hurdle for ArcLight Capital's acquisition of Brookfield Infrastructure's 25% stake in NGPL Holdings.

The transaction will create an interesting ownership dynamic: ArcLight funds will hold a 62.5% economic interest while KMI maintains a 37.5% stake. Despite this economic imbalance, governance rights will be split equally with each party entitled to elect 50% of board members. Most importantly, KMI will continue operating the pipeline assets.

This structure indicates KMI has prioritized maintaining operational control and strategic influence over these natural gas pipeline assets while reducing its capital commitment. The equal governance despite unequal ownership suggests KMI negotiated strongly to preserve its operational role and strategic decision-making influence.

Bond investors have clearly signaled comfort with this arrangement by providing their consent. The bond amendments specifically prevent this ownership change from triggering default provisions that would otherwise potentially require bond repurchases or refinancing.

For KMI shareholders, this represents a structural change that maintains the company's operational role in these assets while potentially freeing up capital for other strategic priorities. The transaction is expected to close in Q2 2025, subject to customary conditions.

NEW YORK, April 8, 2025 /PRNewswire/ -- NGPL PipeCo LLC, a Delaware limited liability company (the "Company"), announced today that the requisite consents have been received from the holders ("Holders") of the Company's outstanding (i) 4.875% Senior Notes due 2027 (the "2027 Notes") and (ii) 3.250% Senior Notes due 2031 (the "2031 Notes" and, together with the 2027 Notes, the "Notes" and each a "Series of Notes") to certain amendments (the "Proposed Amendments") to the terms of (i) the Indenture, dated as of August 1, 2017, relating to the 2027 Notes (the "2027 Notes Indenture"), by and between the Company and U.S. Bank National Association ("U.S. Bank"), as trustee, as amended and supplemented to date, and (ii) the Indenture, dated as of May 14, 2021, relating to the 2031 Notes (the "2031 Notes Indenture" and, together with the 2027 Notes Indenture, the "Indentures" and, each, an "Indenture"), by and between the Company and U.S. Bank, as trustee, as amended and supplemented to date.

The Consent Solicitations are subject to the terms and conditions set forth in the Consent Solicitation Statement dated March 31, 2025 (the "Consent Solicitation Statement").

As of 5:00 p.m., New York City time, on April 8, 2025, the consent date with respect to each Consent Solicitation, the Company has been advised by Global Bondholder Services Corporation, the information, tabulation and paying agent for each Consent Solicitation, that consents were validly delivered and not revoked in an amount exceeding the requisite consents threshold required under the Indentures for the Proposed Amendments.

The Consent Solicitation with respect to each Series of Notes was conducted in connection with the previously announced transaction (the "Transaction") pursuant to which Brookfield Infrastructure US Holdings I, a Delaware corporation, agreed to sell entities that hold its entire 25.0% interest in NGPL Holdings LLC ("NGPL Holdings"), the Company's indirect parent company, to one or more funds controlled by ArcLight Capital Partners, LLC ("ArcLight"). Upon closing of the Transaction, ArcLight funds and Kinder Morgan, Inc. (NYSE: KMI) ("Kinder Morgan") will each hold equal entitlements to elect 50% of the members of the board of directors, and ArcLight funds will hold a 62.5% economic interest in NGPL Holdings. Kinder Morgan will continue to operate the Company's pipeline assets and holds a 37.5% economic interest in NGPL Holdings. The Transaction is expected to close in the second quarter of 2025, subject to customary closing conditions.

As a result of receiving the requisite consents to the Proposed Amendments to the Indenture with respect to each Series of Notes, the Company and the Trustee will enter into a supplemental indenture with respect to each Series of Notes that sets forth the Proposed Amendments with respect to such Series of Notes. The Proposed Amendments with respect to each Series of Notes will amend the defined term "Change of Control" in each Indenture to provide that the Transaction will not constitute a Change of Control under such Indenture. Each supplemental indenture will become valid, binding and enforceable upon its execution, but the Proposed Amendments to the Indenture with respect to each Series of Notes will not become operative until the consent fee relating to such Series of Notes is paid.

The obligation of ArcLight to pay the consent fee is conditioned upon the closing of the Transaction and the satisfaction or waiver of certain other conditions precedent set forth in the Consent Solicitation Statement.

This announcement does not constitute an offer to sell any securities or the solicitation of an offer to purchase any securities. Each Consent Solicitation was made only pursuant to the Consent Solicitation Statement. The Consent Solicitations were not made to Holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require any Consent Solicitation to be made by a licensed broker or dealer, such Consent Solicitation was deemed to be made on behalf of the Company by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

Barclays Capital Inc. acted as the sole solicitation agent for the Consent Solicitations. Global Bondholder Services Corporation acted as the information, tabulation and paying agent for the Consent Solicitations.

Questions or requests for assistance in relation to the Consent Solicitations, including payments of the consent fee, may be directed to Barclays Capital Inc. at (800) 438-3242 (toll free) or (212) 528-7581 (collect).

About the Company

NGPL PipeCo LLC (the "Company") is a Delaware limited liability company and issuer of each Series of Notes. Natural Gas Pipeline Company of America LLC, an indirectly wholly owned subsidiary of the Company ("OpCo"), is the largest transporter of natural gas into the high-demand Chicago-area market as well as one of the largest interstate pipeline systems in the country. It is also a major transporter of natural gas to large liquefied natural gas export facilities and other markets located on the Texas and Louisiana Gulf Coast. OpCo has approximately 9,100 miles of pipeline, more than 1 million compression horsepower and 288 billion cubic feet of working natural gas storage. OpCo provides its customers access to all major natural gas supply basins directly and through its numerous interconnects with intrastate and interstate pipeline systems.

About ArcLight Capital Partners, LLC

ArcLight is a leading infrastructure investor which has been investing in critical electrification infrastructure since its founding in 2001.  ArcLight has owned, controlled or operated over ~65 GW of assets and 47,000 miles of electric and gas transmission and storage infrastructure representing $80 billion of enterprise value. ArcLight has a long and proven track record of value-added investing across its core investment sectors including power, hydro, solar, wind, battery storage, electric transmission and natural gas transmission and storage infrastructure to support the growing need for power, reliability, security, and sustainability. ArcLight's team employs an operationally intensive investment approach that benefits from its dedicated in-house strategic, technical, operational, and commercial specialists, as well as the firm's ~1,900-person asset management partner. For more information, please visit www.arclight.com.

About Kinder Morgan, Inc.

Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 704 Bcf of working natural gas storage capacity and have renewable natural gas production capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at http://www.kindermorgan.com/. 

Forward-Looking Statements

This news release includes forward-looking statements. Generally, the words "expects," "believes," anticipates," "plans," "will," "would," "shall," "estimates," and similar expressions identify forward-looking statements, which are generally not historical in nature. Forward-looking statements in this news release include express or implied statements concerning the Transaction, including the parties' ability to satisfy customary conditions to closing and the anticipated timing of closing. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although the Company believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any forward-looking statements will materialize. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include the ability of the parties to satisfy customary conditions to closing of the transaction. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, the Company undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on forward-looking statements.

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SOURCE NGPL PipeCo LLC

FAQ

What ownership changes will occur in NGPL Holdings after ArcLight's acquisition?

ArcLight funds will hold 62.5% economic interest while KMI retains 37.5%, with both parties having equal board election rights (50% each).

When is the ArcLight-Brookfield NGPL Holdings transaction expected to close?

The transaction is expected to close in the second quarter of 2025, subject to customary closing conditions.

What amendments were approved for NGPL PipeCo's 2027 and 2031 Senior Notes?

The amendments modify the 'Change of Control' definition to ensure the ArcLight acquisition won't trigger change of control provisions in the indentures.

Will KMI continue to operate NGPL's pipeline assets after the ownership change?

Yes, Kinder Morgan will continue to operate NGPL's pipeline assets after the transaction closes.