White & Case advises TC Energy on South Bow's CAD 7.9 billion notes offering for Liquids Pipelines spinoff

Global law firm White & Case LLP has advised TC Energy Corporation (TSX, NYSE: TRP) on a notes offering by South Bow Corporation of approximately CAD 7.9 billion in aggregate principal amount in connection with the spinoff of TC Energy's Liquids Pipelines business.

Establishing an independent, investment-grade debt capital structure was one of the final milestones required to consummate the spinoff transaction, which is expected to close early in the fourth quarter of 2024.

The notes offering comprised US$700 million in aggregate principal amount of 4.911% senior unsecured notes that will mature on September 1, 2027; US$1 billion in aggregate principal amount of 5.026% senior unsecured notes that will mature on October 1, 2029; US$1.25 billion in aggregate principal amount of 5.584% senior unsecured notes that will mature on October 1, 2034; US$700 million in aggregate principal amount of 6.176% senior unsecured notes that will mature on October 1, 2054; CAD 450 million in aggregate principal amount of 4.323% senior unsecured notes that will mature on February 1, 2030; CAD 500 million in aggregate principal amount of 4.616% senior unsecured notes that will mature on February 1, 2032; CAD 500 million in aggregate principal amount of 4.933% senior unsecured notes that will mature on February 1, 2035; US$450 million in aggregate principal amount of 7.625% junior subordinated notes that will mature on March 1, 2055; and US$650 million in aggregate principal amount of 7.500% junior subordinated notes that will mature on March 1, 2055.

The net proceeds of the notes offering were placed into escrow pending the completion of the spinoff transaction. Upon completion of the spinoff transaction, the escrowed funds will be released to South Bow and used to repay indebtedness owed by South Bow and its subsidiaries to TC Energy and its subsidiaries. Separately, South Bow established a CAD 2.0 billion four-year senior unsecured revolving credit facility in the third quarter of 2024, which will become available upon completion of the transaction. The facility will be used for committed capital expenditures and other general corporate purposes, and will provide significant liquidity for South Bow.

The White & Case team was led by Capital Markets partners A.J. Ericksen and Laura Katherine Mann (both in Houston), and included associates Bryson Manning, Chanel Holmes (both in Houston), William Quish and Elana Cates (both in New York); Tax partner Chad McCormick, and associates Neil Clausen, Sadi Moradi and Kealan Hannes (all in Houston); Debt Finance partner Joseph Brazil and associate Shana Vantusko (both in New York); and Environment & Climate Change partner Taylor Pullins (Houston).

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