The failed transaction marks the first time a syndicated Canadian-dollar bond deal has been cancelled
“The aggregate compensation is not material to TC Energy and will be paid directly by the Company and not via customers or partners,” TC Energy said. “We are providing this compensation voluntarily with no legal obligation.”
This is an “excellent outcome,” according to Earl Davis, head of fixed income at BMO Global Asset Management. Though immaterial to TC Energy, it’s “very material” to the confidence and continued smooth functioning of the market, he said.
Indigenous participation
The bond sale was expected to receive a credit rating similar to Alberta’s and was put together with two 30-year portions. It likely won’t be the last offering to finance equity purchases of infrastructure development by indigenous groups.
“As the use of equity loans and equity loan guarantees gains an operating track record, direct Indigenous equity participation will become a meaningful and standard part of energy project development, with larger deals and greater Indigenous communities’ ownership stakes,” Biao Gong, senior vice president, project finance at Morningstar DBRS, wrote in a July note.