RE:RE:RE:In AnticipationThe debt is not an issue. Below is RBC comments on IPL debt from June 1. Notice why RBC thinks buying IPL will turn from a good deal to a GREAT deal. Heartland startup combined with assets sales will make this a GREAT deal. Below is RBC comments.
We believe the focus will be on the credit and financial metrics... We think
that items such as the optics of Inter Pipeline's high current debt leverage
(i.e., prior to the commissioning of HPC) and uncertainty with respect to
potential credit rating actions will be an overhang on Pembina's shares in
the near-term. Over the medium-term, we believe the market will focus on
Pembina's ability to stay within its guardrails if commodity prices fall.
...however, we see asset sales as a way to take the transaction from
good to great. We believe the transaction provides Pembina with a suite
of asset monetization candidates that could have the multi-faceted benefit
of: (1) putting any concerns about credit to rest by reducing leverage;
(2) highlighting an attractive valuation marker for the remaining assets;
(3) improving the returns on capital employed; and (4) increasing the
growth rate by monetizing low growth, or declining, assets.
Specifically, we highlight the oil sands pipelines, which could be partially or
fully monetized, and in particular the high-leverage, low-return Corridor pipeline system.