Brookfield Asset Management is preparing to raise around $3bn in debt to support its acquisition of Colonial Enterprises, the parent company of Colonial Pipeline, according to a report by Bloomberg citing sources familiar with the matter.
The financing, which is being arranged by Morgan Stanley, is expected to come to market as early as June and may take the form of leveraged loans or bonds. The structure will see the new debt issued at the holdco level, while Colonial’s existing obligations will remain ring-fenced within the operating company.
The transaction follows Brookfield Infrastructure Partners’ agreement in April to acquire Colonial Enterprises for approximately $9bn. The deal sees Brookfield acquiring the pipeline operator from a consortium of investors including KKR, Caisse de Dépôt et Placement du Québec, Shell, IFM Investors, and Koch Industries.
Headquartered in Alpharetta, Georgia, Colonial Pipeline operates the largest refined products pipeline in the US, spanning over 5,500 miles from the Gulf Coast to the Northeast.
Brookfield brings to the table a track record of investment in global energy infrastructure, including its controlling interest in Brazil’s NTS gas pipeline network and its role in a $10.1bn consortium buy-in to Abu Dhabi’s gas pipeline assets in 2020.
