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Case Study

Natural gas pipeline operator accesses private capital market for expansion needs

Texas-based Gas Transmission Northwest owns and operates a 1,353-mile long interstate natural gas pipeline system that transports natural gas from Western Canadian to downstream markets in Washington, Oregon, and California.

Case Study

Natural gas pipeline operator accesses private capital market for expansion needs

Texas-based Gas Transmission Northwest owns and operates a 1,353-mile long interstate natural gas pipeline system that transports natural gas from Western Canadian to downstream markets in Washington, Oregon, and California.

At a Glance

Securing capital that fits into long-term plans

Gas Transmission Northwest ("GTN") needed to refinance US$100 million of Senior Notes and also needed to finance its capacity expansion for an upcoming project. GTN sought certainty of execution, efficient access to capital, and reduced transaction financing costs for its maturing notes.

Relationship since 2016
Transaction details:
  • US$175,000,000 Senior Unsecured Notes
  • US$250,000,000 Pricoa-Shelf Facility

The Full Story

Private capital for refinancing and expansion funding

Houston, Texas-based Gas Transmission Northwest ("GTN") owns and operates a 1,353-mile long interstate natural gas pipeline system that transports natural gas from the Western Canadian Sedimentary Basin to downstream markets in Washington, Oregon, and California.

We have maintained a relationship with GTN’s parent, TC Energy, for nearly two decades. Over this time frame, we have completed multiple asset level financings on behalf of TC Energy and its affiliates involving seven separate pipeline systems totaling more than fourteen thousand miles of infrastructure in Canada and the United States.  

Most recently, GTN needed to refinance US$100 million of Senior Notes maturing in 2020, and additionally needed to finance its capacity expansion for the announced GTN Xpress project. GTN sought certainty of execution, efficient access to capital, and reduced  transaction financing costs for its maturing notes. Additionally, GTN prioritised future flexibility in the timing, tenor, and structure of future notes to be issued in support of ongoing capital expenditures.

While TC Energy explored both public issuance and bank market options, increasing market volatility and limited public demand for small and infrequent issuances favored a more tailored approach in the private market, which we were able to provide. TC Energy also prioritised the ability to secure long-term, fixed-rate funding options to match the assumptions used in its  investment decision process. Familiarity with our investment expertise and Pricoa-Shelf structure, along with the ability to meaningfully reduce upfront funding costs and fees versus alternative capital solutions, TC Energy elected to pursue a private shelf facility with us in tandem with an initial delayed draw.  

We worked quickly to establish a three year, US$250 million Pricoa-Shelf Facility with an initial draw of US$175 million of Senior Unsecured Notes. Notes drawn under the facility are subject to an average life and final maturity of up to 15 years and 20 years, respectively, which fits into GTN’s long-term plans.

Gas pipelines

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Brittany Braden, CFA
Senior Vice President
+1.214.720.6277
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Energy

Perspectives

More than meets the eye: A closer look at the most commonly used type of capital.
The Pricoa Private Capital Guide to Senior Debt.
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