01—Abstract
Summary
Summary of the 10-K/A filed March 1, 2013. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy Partners, L.P.
(CQP) reports in this filing that its wholly owned subsidiary, Sabine Pass LNG, L.P., closed the sale of $420 milliona aggregate principal amount of 6.5% Senior Secured Notes due 2020 on October 16, 2012. The notes were sold in a private placement, mature November 1, 2020, and are senior secured obligations. The Indenture includes customary covenants, a debt payment account requirement, and optional redemption provisions, including a right to redeem up to 35% of the notes at 106.5% of principal from equity offering proceeds before November 1, 2015.
The filing also discloses amendments dated February 18, 2013 to LNG Sale and Purchase Agreements with KOGAS and GAIL. Under the amended agreements, the start dates for first commercial LNG delivery from Train 3 (KOGAS) and Train 4 (GAIL) are aligned with the EPC Contract completion dates, and the deadline for satisfying certain conditions precedent, including final investment decisions, moves from June 30, 2013 to December 31, 2013.
For compliance purposes, the Partnership states that it did not engage in any transactions with Iran or Iran-related persons during 2012. It also discloses, based on notice from Blackstone (an approximately 30%b equity holder with board representation that may be deemed an affiliate), third-party activities involving TRW Automotive Holdings Corp. and Travelport Limited, which the Partnership says it has not independently verified.
02—Key points
Key Highlights
- Sabine Pass LNG, L.P. closed a $420 million private placement of 6.5% Senior Secured Notes due 2020 on October 16, 2012, with interest payable semi-annually beginning May 1, 2013.
- The 2020 Notes can be redeemed at the company's option on or after November 1, 2016, and up to 35% may be redeemed at 106.5% of principal before November 1, 2015 using equity offering proceeds.
- Registration rights require Sabine Pass LNG to use commercially reasonable efforts to complete an exchange offer within 360 days of the issue date, with additional interest payable if it fails to do so.
- Amendment No. 1 to the KOGAS SPA sets the Train 3 first-delivery window at 180 days starting 48 months after conditions precedent are satisfied or waived.
- Amendment No. 1 to the GAIL SPA sets the Train 4 first-delivery window at 180 days starting 57 months after conditions precedent are satisfied or waived.
- Both SPA amendments extend the deadline for satisfying conditions precedent, including Train 3 and Train 4 final investment decisions, from June 30, 2013 to December 31, 2013.
- The Partnership reports no transactions with Iran or Iran-related persons in 2012, and discloses third-party Iran-related activities of Blackstone portfolio companies on a notice basis.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-K/AFY2012filed March 1, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $264.50M$283.89M | −6.8% |
| R&D Expenses | $37.56M$32.45M | +15.8% |
| Operating Expenses | $226.25M$161.80M | +39.8% |
| Operating Income | $38.24M$122.08M | −68.7% |
| Interest Expense | $171.65M$173.59M | −1.1% |
| Net Income | -$175.43M-$53.56M | −227.5% |
| EPS (Basic) | $0.27$1.23 | −78.0% |
| Shares Outstanding (Basic) | 33.47M27.91M | +19.9% |
05—Questions
Frequently Asked Questions
What debt did Sabine Pass LNG issue in October 2012?
Sabine Pass LNG, L.P., a wholly owned subsidiary, closed the sale of $420 million aggregate principal amount of 6.5% Senior Secured Notes due 2020 on October 16, 2012. The notes mature November 1, 2020, and were sold in a private placement under Rule 144A and Regulation S.
What are the key terms of the 2020 Notes' redemption and covenants?
Sabine Pass LNG may redeem all or part of the notes on or after November 1, 2016 at fixed redemption prices, and may redeem at a make-whole price before that date. Before November 1, 2015, it may redeem up to 35% of principal at 106.5% using net proceeds of equity offerings, provided at least 65% of the original principal remains outstanding. The Indenture also contains covenants limiting additional debt, dividends, asset sales, liens, and affiliate transactions, and requires monthly deposits of one-sixth of the next interest payment into a debt payment account.
What changed in the KOGAS and GAIL LNG sale agreements?
On February 18, 2013, Sabine Pass Liquefaction entered into Amendment No. 1 to the KOGAS and GAIL agreements. The KOGAS amendment sets the Train 3 first-delivery window at 180 days beginning 48 months after conditions precedent are satisfied or waived, and the GAIL amendment sets the Train 4 window at 180 days beginning 57 months after that date. Both amendments extend the deadline for satisfying key conditions, including final investment decisions, from June 30, 2013 to December 31, 2013, and align the start dates with the EPC Contract completion dates.
Does the Partnership have Iran-related exposure, and what does the filing say about Blackstone?
The Partnership states that during 2012 it did not engage in any transactions with Iran or persons related to Iran. Blackstone CQP HoldCo LP, which holds approximately 30% of the Partnership's equity and has board representation, may be deemed an affiliate. Blackstone notified the Partnership of Iran-related disclosures by its portfolio companies. These include TRW Automotive Holdings Corp., which reported gross revenue of approximately $8,326,000 and net profit of approximately $377,000 from certain sales that have since been discontinued, and Travelport Limited, which provides travel-related IT services to Iran Air and Iran Air Tours. The Partnership has not independently verified these disclosures.
06—Continue