Investors Midstream

TC Energy looking for subordinated trust notes offering to reduce debt

Trust notes TC energy

TC Energy, the Canadian midstream company, today announced it its seeking for an offering of subordinated trust notes for its TransCanada Trust; a wholly-owned financing trust of its subsidiary TransCanada Pipelines (TCPL).

Firstly, the trust notes would be guaranteed on a subordinated basis by TCPL; under the Trust’s short form base shelf prospectus dated February 26, 2021, as the company reports.

Secondly, the company would use the earnings to redeem its issued Cumulative Redeemable Minimum Rate Reset First Preferred Shares. Such move would allow TC Energy to reduce its short-term debt as well as other corporate purposes.

Thirdly, there is no certainty that the trust offering will succeed, nor in which terms it would be completed.

In fact, the company highlights that the offering “does not constitute an offer to sell; or the solicitation of an offer to buy the Trust Notes.”

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TC Energy trust notes

Trust notes offering do not represent an offer to buy

Moreover: “The Trust Notes have not been approved or disapproved by any regulatory authority.”

“Also, they have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities law, and may not be offered or sold within the United States or to, or for the account or benefit of, United States persons.”

On the other hand, in mid-February, TC Energy announced its net income for the fourth quarter 2020 of $1.1 billion or $1.20 per share compared to net income of $1.1 billion or $1.18 per share for the same period in 2019.

“We are very happy with the performance of our diversified portfolio of regulated and long-term contracted assets; which generated record financial results again in 2020,” said François Poirier, TC Energy’s President and Chief Executive Officer.

Finally, the company, for its 2021’s performance, expects to remain primarily insulated from the volatility associated with volume throughput and commodity prices.

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