Press Release

DBRS Places Kinder Morgan Canada Limited and Kinder Morgan Cochin ULC Under Review with Developing Implications

August 22, 2019

DBRS Limited (DBRS) placed the following ratings Under Review with Developing Implications:

-- Kinder Morgan Canada Limited (KML), Preferred Shares – Cumulative (the Preferred Shares) rating of Pfd-3
-- Kinder Morgan Cochin ULC (KMU), Issuer Rating of BBB

The rating action follows the announcement by KML that it had reached an agreement with Pembina Pipeline Corporation (Pembina; rated BBB with a Stable trend by DBRS) under which Pembina has agreed to acquire all the outstanding common equity of KML (the Acquisition), including the 70% majority voting interest held by Kinder Morgan Inc. (KMI; rated BBB with a Stable trend by DBRS). On closing, each shareholder of KML will receive 0.3068 shares of Pembina. Concurrently, Pembina has agreed to purchase the U.S. portion of the Cochin Pipeline from KMI for USD 1.546 billion. The Acquisition has been approved by the board of directors of KML and Pembina and is expected to close in the first half of 2020, subject to (1) the approval of at least 66 2/3 per cent of the holders of KML’s Restricted Voting Shares and Special Voting Shares, voting together as a single class, and a majority of the holders of Restricted Voting Shares; (2) approval of the Court of Queen’s Bench of Alberta; (3) certain regulatory approvals in Canada and the United States; (4) completion of the sale of the Cochin Pipeline by KMI to Pembina and (5) other customary conditions.

KMU’s Issuer Rating is based on its strong financial profile and expectation that leverage will remain reasonable for the current rating. The Preferred Shares rating of KML, which owns 30% of KMU and holds no other material assets, is based on the strength of KMU, the structural support in place for the benefit of the holders of the Preferred Shares (please see DBRS’s report on Kinder Morgan Canada Limited and Kinder Morgan Cochin ULC, dated March 25, 2019, for details) and the expectation that no debt will be issued by KML. DBRS expects to resolve the Under Review status once additional information becomes available with respect to Pembina’s intention for the Preferred Shares and the proposed capital structure at KMU post completion of the Acquisition.

All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Pipeline and Diversified Energy Industry, DBRS Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers, DBRS Criteria: Rating Corporate Holding Companies and Their Subsidiaries and DBRS Criteria: Guarantees and Other Forms of Support, which can be found on under Methodologies & Criteria.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit or contact us at

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada


Kinder Morgan Canada Limited
Kinder Morgan Cochin ULC
  • US = Lead Analyst based in USA
  • CA = Lead Analyst based in Canada
  • EU = Lead Analyst based in EU
  • UK = Lead Analyst based in UK
  • E = EU endorsed
  • U = UK endorsed
  • Unsolicited Participating With Access
  • Unsolicited Participating Without Access
  • Unsolicited Non-participating