Coastal GasLink, a major pipeline project in Western Canada, is preparing a two-part bond sale to raise C$1 billion, according to sources familiar with the matter. The shorter tranche, valued at approximately C$300 million, is set to mature in 11.25 years, with initial pricing discussions around one percentage point above government benchmarks. The longer portion, targeting C$700 million, will mature in about 19 years, with pricing talks at roughly 1.15 percentage points over government bonds. The sources requested anonymity as they are not authorized to speak publicly.
Background and Expansion Plans
In 2024, Coastal GasLink issued what was then the largest Canadian-dollar corporate bond to finance the pipeline, which transports natural gas from the Montney shale formation in Western Canada to the Shell-led LNG Canada terminal on the British Columbia coast. The company is currently working on the Cedar Link expansion, connecting to a smaller export facility in the same region. The consortium behind LNG Canada is evaluating a decision to build a second phase for the complex, which would double its capacity if approved.
Market Timing and Stakeholders
The bond sale is expected to hit the market as early as Thursday, coinciding with large coupon payments from maturing Canadian bonds, which could attract investor interest. TC Energy, the operator and co-owner of Coastal GasLink, did not immediately respond to a request for comment. Other owners include KKR & Co. and an Alberta pension fund.
