Saturday, January 10, 2009

TransCanada Debt Grows

Get them while they're hot! TransCanada, the Alaska Gasline Inducement Act licensee is offering big interest rates on a multi-billion dollar bond issue:

Canada-based TransCanada Corp. on Friday said its subsidiary, TransCanada PipeLines Ltd., completed an offering of $750 million of 7.125 percent senior notes and $1.25 billion of 7.625 percent senior notes to partially fund capital projects and pay off debt. The first note is due Jan. 15, 2019 and the second note is due Jan. 15, 2039.

Standard and Poor's Ratings Services assigned its "A-" rating to these two senior notes and to the company's long-term corporate credit rating, saying the investment grade rating reflects the "mature-but-predictable earnings stream" from its natural gas pipeline operations and assets, the high level of free cash that its operations generate and the cash flow's increasingly diverse sources. However, S&P added, the company's leverage, expensive capital projects in the next two years and concerns over its nuclear operations expansion constrain the ratings.

(Link to Forbes)
I'm glad to hear that TransCanada is among the firms that continues to fund a pursue projects - that employs people and that's a good thing. Having said that it's still unclear how they will fund a $40 Billion gas line with their current financial resources.

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