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Kinder Morgan Energy Partners, L.P. Message Board

  • TimetheMarket TimetheMarket Aug 27, 2002 4:48 PM Flag

    Citrus Pipeline

    With the financing complete plus combined $2 billion in credit lines look for KMP/KMI to buy Enron's 50% interest in the Citrus NG Pipeline extending from South Texas to South Florida at a very favorable price which will guarantee great future growth in payouts for KMP.


    You heard it here first.


    This is why I posted earlier that we will see 40 a share for KMP before the end of this calendar year.

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    • So what debt/equity ratio do you think will be applicable going forward? Until the downgrade I figured KMx was in a box - trouble raising equity, and at the maximum debt equity ratio. The recent transactions do nothing to improve that situation.The equity was to pay for the Tejas transaction from Q1(but was less than required) and the debt deal simply traded short term for long term. Nothing wrong with that but neither does anything for our acquisition ability unless we can increase leverage. Do you think the debt downgrade gives room for that and if so by how much?

    • "Kinder Morgan Inc. said the debt and equity offering proceeds will pay down all the commercial paper at both companies.

      Kinder Morgan Energy has no "significant" bond maturities until 2005, Kinder Morgan Inc. said.

      In addition, Kinder Morgan Inc. has $900 million in credit facilities, and the energy partnership has $1.05 billion available."


      This is from the PR. You are right to say that the offering were used to pay down the short term money.

      My point is the rest of the PR statement which says that KMP has no significant debt repayments for the next 5 years AND they have about 2 billion in lines of credit to buy something.

      They said this for a reason and my guess is that they are tipping off the market in subtle way that they have the money to buy sonmething if they want. Given that so much is for sale right now I don't think you need to be a rocket scientist to put 2 and 2 together.

    • I love the PAA here.

    • $1.84M equity and debt offering will be used to payoff all the existing debt of KMI and KMP. Kinder refinanced existing debt for new debt at a lower interest rate.

      The people who put up the money are not always professional money managers or institutional investors. I bought 3000 units of KMR's IPO, and 1500 units of TPP and 4000 units of PAA in secondary offering. I'm not exactly a professional money manager nor am I an institutional investor.

    • It would be nice to own all of Fla Gas. I doubt that El Paso would sell their stake and if they were interested I doubt that they would sell for a price acceptable to Kinder. But who knows. I suspect all will be revealed in the next month or so.

    • Slip

      I think the people who bought the debt and especially the people who bought into the equity stake through KMR are taking a long term view. They put up a lot of money in a lousy overall market and in an industry with a bunch of high profile brankruptcies. So they voted with their money on KM and so for me this is a good thing.

      I wouldn't worry about the stock price right now. I really belive that the 2 billion KM has now to buy something at bargain basement prices will be the vehicle for some huge growth in the future much as they have done with their acquisitions in the past.


      A new acquisition such Transwest or Citrus will propel the price north of 40 in my opinion. I have loaded up and am now just trying to be patient.

    • I have been posting on the KMi board for quite some time now. I have speculated that KMI/KMP will make a move for Transwestern and/or Florida Gas Transmission. It would be nice to land both Enron's and El Paso's 50% stakes in FGT. Also, chances are that Williams will continue to unload some nice pipelines. Man, Williams is one screwed up company but boy do they have some loyal followers. If you mention the 14 billion in debt they jump all over you.

    • My only point is that with the influx in equity (buyers of the stock)-the price of the stock has not moved. Thus the number of buyers = the numbers of sellers. I think Warren B. will be good for this sector and though he is HE.....the KM team has a proven track record for buying pipes.

    • Slip

      Not sure what your point is.

      All I am saying is that the KM family of companies got about 350 million in new equity plus about 1.5 billion in corporate bonds. KM did this without too much effort as the offerings were sold out almost immediately. The people who put up this money for the debt and equity are professional money managers. Hence my comment.

      In my opinion the PR from KM saying that they had 2 billion in available funds PLUS the fact that KMP does not have any significant debt repayments for the next 5 years is a BIG clue that something is coming.

    • "People a lot smarter than me have poured a ton of money into this company"
      Hummmmm-seems to me when the price is flat for the period you describe there are more buyers than there are sellers :-) Money poured in would equal price go up.
      slip

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