Keyera arranges note offerings

Executive Summary

• Keyera Corp. announced a $2.8 billion debt offering ($2.3 billion senior unsecured notes and $500 million hybrid subordinated notes) to finance a portion of its $5.15 billion acquisition of Plains Midstream Canada ULC (PMC).
• The acquisition involves substantially all of Plains' Canadian natural gas liquids (NGL) business plus select US assets, with closing expected in Q1 2026, subject to regulatory approval.
• The offering includes a special mandatory redemption clause: if the acquisition does not close by June 30, 2026, or is terminated, Keyera must redeem the notes at 101% of principal plus accrued interest.

Key Details

• Senior Unsecured Notes:
  • $500 million aggregate principal, 3.702% interest rate, due 2030.
  • $600 million aggregate principal, 4.204% interest rate, due 2033.
  • $500 million aggregate principal, 4.569% interest rate, due 2035.
  • $700 million aggregate principal, 5.309% interest rate, due 2055.
• Hybrid Subordinated Notes:
  • $500 million aggregate principal, 6.000% fixed-to-fixed rate, due 2055.
• Use of Proceeds:
  • Net proceeds from this offering, combined with proceeds from a previously announced subscription receipt offering, will finance a portion of the $5.15 billion cash consideration for the acquisition of Plains Midstream Canada ULC (PMC).
  • Remaining balance, if any, to be used for general corporate purposes.
• Acquisition Details (PMC):
  • Target: Plains Midstream Canada ULC (PMC).
  • Assets: Substantially all of Plains' Canadian NGL business plus select United States assets.
  • Consideration: Total cash consideration of $5.15 billion, subject to adjustments.
  • Closing Conditions: Expected to close in Q1 2026, subject to customary conditions including clearance under the Competition Act (Canada) and other regulatory reviews.
  • Exclusions: Specific crude oil assets and US facilities (Bumstead, San Pedro, Shafter, and Tampa) will be spun out and excluded from the acquisition.
• Redemption Clause:
  • If the acquisition does not close by 5 p.m. Calgary time on June 30, 2026, or if the agreement is terminated/Keyera announces it will not proceed, the notes are subject to special mandatory redemption at 101% of the principal amount plus accrued and unpaid interest.
• Offering Structure:
  • Private placement in reliance on prospectus exemptions in Canadian provinces.
  • Preliminary offering memoranda dated Sept. 12, 2025; final offering memoranda expected on or about Sept. 15, 2025.
  • Syndicate co-led by RBC Capital Markets and CIBC Capital Markets, with TD Securities as joint bookrunners.
• Consent Solicitation:
  • Following closing, Keyera intends to solicit consent from holders of existing hybrid notes (6.875% due 2079 and 5.95% due 2081) to amend indentures.
  • Amendments will provide an exchange right allowing holders to exchange existing hybrid notes for new hybrid notes with substantially the same terms (interest rate, payment dates, maturity, redemption) but excluding provisions requiring delivery of preferred shares upon certain bankruptcy events.
  • This change ensures the new hybrid notes rank equally in right of payment with existing hybrid notes upon bankruptcy events.

Notable Quotes

• None provided in the text.