Kinder Morgan Inc. (KMI) on Tuesday completed a plan begun in early August with affiliate Kinder Morgan Energy Partners LP (KMP) to issue a total of $1.84 million of debt and equity financing. KMI completed $750 million in 10-year, 6.3% notes, while KMP issued $343 million of new equity capital, $500 million of 31-year 7.3% debt and $250 million of five-year 5.35% debt. The debt and equity offering proceeds will be used to pay down both of the companies’ commercial paper.

“By issuing equity and terming up our debt, we have significantly improved our financial flexibility and our ability to move opportunistically,” said Richard Kinder, CEO of both companies, in a statement. “We will pay down essentially all of our commercial paper at both KMI and KMP with the proceeds of these offerings. In addition, KMP has $1.05 billion available under its credit facilities and KMI has $900 million under its credit facilities. KMP has no significant bond maturities until 2005.”

Stating that “management expressed comfort” in the numbers, KMI and KMP also reaffirmed their earnings guidance for the year on Tuesday, with both expecting gains in the third quarter and significant gains through the year over 2001’s earnings. KMI said that it expects to earn 63 cents per share in the third quarter, while KMP expects to earn 45 cents in the quarter. The forecasts match the current consensus of Thomson/First Call financial analysts.

Both KMI and its master limited partnership affiliate also expect to top 2001 yearly earnings, with KMI forecasting earnings of $2.64 per share for the entire year, which would be a gain of 34% over 2001. KMP is forecasting its year-end earnings to be $1.83 — a 17% jump over 2001.

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