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Kinder Morgan’s Leverage Improved

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Kinder Morgan’s leverage

Kinder Morgan’s adjusted net debt-to-adjusted EBITDA ratio was 4.5x at the end of 2018. The company expects to maintain the ratio at 4.5x at the end of 2019. “Our three-year campaign to strengthen KMI’s balance sheet reached an important milestone as we ended 2018 with long-term and short-term debt less cash and cash equivalents of approximately $33.2 billion, and an Adjusted Net Debt-to-Adjusted EBITDA ratio of approximately 4.5 times,” CEO Steve Kean noted in the company’s fourth-quarter earnings release.

As the above graph shows, Kinder Morgan has significantly reduced its leverage from the levels in 2015.

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Credit ratings

In December, Moody’s upgraded Kinder Morgan’s senior unsecured rating from Baa3 to Baa2. According to the agency, proceeds from Kinder Morgan Canada will help reduce Kinder Morgan’s debt and improve its 2019 leverage.

In January, Standard & Poor’s upgraded Kinder Morgan’s issuer rating from BBB- to BBB.

Share repurchases

In December, Kinder Morgan repurchased shares for ~$25 million. The company has repurchased shares worth $525 million under its $2 billion buyback program, which was approved in 2017.

In January 2019, Enterprise Products Partners (EPD) announced a $2 billion unit buyback program.

Next, we’ll discuss the latest changes in institutional investors’ Kinder Morgan holdings.

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