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Wednesday, 3 August 2011

2nd UPDATE: Kinder Morgan Energy Partners Plans 2-Part $750 Million Offering

Kinder Morgan Energy Partners selling $750 million offering in 10.5- and 30- year notes

--Proceeds will be used to repay short-term debt and for general corporate purposes

--The company last issued debt in February with a $1.1 billion deal

(Updates with launch levels in second paragraph and final risk premiums in third paragraph.)

By Nicole Hong


NEW YORK -(Dow Jones)- Kinder Morgan Energy Partners LP (KMP), a subsidiary of energy company Kinder Morgan Inc. (KMI), is planning to issue a two-part $750 million bond offering Wednesday in the U.S. market, according to a person familiar with the deal.

The deal comprises a $375 million 10.5-year tranche and a $375 million 30-year tranche.

The 10.5-year piece launched at the narrow end of price guidance, suggesting good demand, with a risk premium of 157 basis points over Treasurys. The 30-year piece launched with a risk premium of 180 basis points over Treasurys, directly in line with price guidance.

Pricing on the senior unsecured notes is expected later Wednesday.

Leading the debt sale are Bank of America Merrill Lynch, Barclays Capital and Citigroup Inc. (C).

Proceeds will be used to repay short-term debt and for general corporate purposes.

The deal has been rated Baa2 by Moody's Investors Service and BBB by Standard & Poor's.

Kinder Morgan Energy Partners last issued debt in February with a $1.1 billion deal, according to data provider Dealogic.

Headquartered in Houston, Kinder Morgan Energy Partners is a pipeline transportation and energy-storage company in North America. Two weeks ago, it reported quarterly earnings dropped 36% to $230.5 million from $361.2 million a year earlier.

Kinder Morgan declined to comment on the deal.

-By Nicole Hong, Dow Jones Newswires; 212-416-3760; nicole.hong@dowjones.com

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