TC Energy (TRP) Investor Update summary

Indigenous Equity Partnership Announcement

• Up to 72 First Nations and Métis groups from Alberta, British Columbia, and Saskatchewan will acquire a 5.34% equity stake in TC Energy's NGTL and Foothills pipeline assets, supported by a CAD 1 billion loan guarantee from the Alberta Indigenous Opportunities Corporation (AIOC).

• This is the largest Indigenous equity partnership and loan guarantee in Canadian history, marking a significant milestone in economic reconciliation and Indigenous economic participation.

• The AIOC's loan guarantee capacity was recently tripled to CAD 3 billion, enabling more opportunities for Indigenous economic involvement across sectors.

• The agreement includes an invitation for a community member to join TC Energy's Indigenous Advisory Council, reinforcing ongoing dialogue and partnership.

• The transaction is expected to close in Q3 2024, subject to community approvals and financing, with each community independently determining its participation.

Strategic and Financial Implications

• The deal implies an enterprise value of approximately $1.65 billion for the partnership assets, including debt.

• The NGTL and Foothills assets are critical infrastructure, connecting about 80% of Western Canadian Sedimentary Basin natural gas production to markets.

• These assets are federally rate-regulated, expected to provide predictable, long-term cash flows.

• The partnership aligns with TC Energy's strategy to foster positive Indigenous relationships and deliver sustainable returns for investors.

• CIBC Capital Markets and TD Securities acted as financial advisors for TC Energy and the Indigenous partnership, respectively.

Broader Impacts and Future Opportunities

• The deal is expected to drive generational prosperity, economic empowerment, and community development for participating Indigenous groups.

• Corporate partners gain deeper understanding of Indigenous values, fostering stronger relationships and more inclusive business practices.

• The AIOC and government leaders emphasize that economic self-determination is essential for true reconciliation and financial sovereignty.

• The partnership sets a global benchmark for Indigenous economic inclusion and is being watched as a precedent for similar initiatives.

• The AIOC is open to expanding into other sectors such as agriculture, forestry, renewables, tourism, and transportation, with energy projects currently providing the strongest returns.