Brookfield Eyes $3 Billion in Debt for Colonial Pipeline

By Aaron Weinman and Chunzi Xu

Brookfield Asset Management Ltd. is lining up approximately $3 billion in debt financing to support its purchase of Colonial Enterprises, which operates the Colonial Pipeline in the US, according to people familiar with the matter.

Morgan Stanley is leading the financing and a deal could emerge in the leveraged loan or bond market as soon as early June, said the people, who were not authorized to discuss the transaction publicly. The new debt financing is expected to sit at the holding-company level, while Colonial’s existing debt will remain on the operating-company level.

Representatives for Brookfield and Morgan Stanley declined to comment.

Brookfield, which conducted the acquisition under Brookfield Infrastructure Partners, agreed to buy Colonial Enterprises for about $9 billion in April, the company said in a press release at the time. Bloomberg News first reported that the Canadian asset management firm had emerged as the front-runner for the pipeline operator in March.

Based in Alpharetta, Georgia, Colonial operates the largest US fuel pipeline system with a network covering more than 5,500 miles from Houston to New Jersey, according to its website. Brookfield is buying the company from subsidiaries of private equity firm KKR & Co., Canadian pension fund Caisse de Dépôt et Placement du Québec, oil major Shell Plc, infrastructure owner IFM Investors Pty and industrial conglomerate Koch Inc.

Brookfield has invested in similar assets around the world including a controlling stake in Brazil’s NTS pipeline. The company is also part of a consortium that bought a $10.1 billion stake in Abu Dhabi’s natural gas pipelines in 2020.

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