(In June 16 item, corrects 10th paragraph to show credit rating is BBB high, not BBB)
CALGARY, Alberta (Reuters) - Kinder Morgan Canada Ltd has raised C$5.5 billion ($4.16 billion) for its Trans Mountain pipeline expansion and could have raised even more, the company said on Friday, despite pressure on banks to back away from the project.
“The syndication of the credit facilities was oversubscribed,” company President Ian Anderson said in the statement. “We are gratified by the outstanding level of support for this project within the financial community.”
Energy infrastructure projects have faced opposition from environmental groups and aboriginal communities whose land they touch. Opposition to Trans Mountain is set to mount after the effective rise of an unfriendly government last month in Canada’s British Columbia province that the pipeline passes.
According to the company’s statement, Kinder Morgan Canada, majority owned by Houston-based Kinder Morgan Inc, has entered into agreements for C$4.0 billion in revolving credit, C$1 billion in contingent credit and C$500 million in revolving working capital.
Kinder Morgan Canada did not specify the source of the credit, although it said the funds would come from a group of banks, some of which underwrote its public offering last month.
Toronto-Dominion Bank and Royal Bank of Canada were the main underwriters, according to Kinder Morgan’s prospectus.
A group of more than 20 indigenous and environmental organizations this month called on 28 major banks, including all underwriters, to back away from Trans Mountain.
Ruth Breech, senior campaigner for Rainforest Action Network, one of the groups, said by phone the banks’ backing of Trans Mountain was disappointing.
“We’ll be committed to challenging this project all the way through,” she said. “There’ll absolutely be follow-up discussions with those banks.”
Ratings agency DBRS Ltd on Friday placed Kinder Morgan Cochin ULC, the Canadian parent company’s operating subsidiary, at BBB (high).
The Trans Mountain expansion has “execution risks” including political and environmental opposition, the agency said. “In its rating assessment, DBRS has conservatively assumed a project delay of one year.”
The expansion almost triples the capacity of the existing pipeline, which is designed to carry crude from Canada’s oil sands to the West Coast.
The expansion has obtained both federal and regulatory approvals and has passed an environmental assessment under British Columbia’s incumbent Liberal Party, which lost its legislative majority in a May 9 election.
The opposition Greens and New Democrats parties, both of which oppose Trans Mountain’s expansion, have sealed a deal to unseat the Liberals.
($1 = 1.3211 Canadian dollars)
Reporting by Ethan Lou; editing by Diane Craft, G Crosse
Our Standards: The Thomson Reuters Trust Principles.