8-KOther EventsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Corporate Update (Feb 28, 2005)

Filed February 28, 2005For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported on February 28, 2005, that its wholly-owned subsidiary, Sabine Pass LNG, L.P., has successfully closed on an $822 million Senior Secured Credit Facility. This significant financing is crucial for funding the majority of the construction costs for the Sabine Pass LNG liquefied natural gas (LNG) receiving terminal located in Cameron Parish, Louisiana. The credit facility, arranged by HSBC Securities (USA) Inc. and SG Corporate & Investment Banking (Societe Generale), demonstrates substantial backing from a syndicate of 47 financial institutions and is a key step in advancing Cheniere's strategic project development. This development is highly investor-focused as it secures the necessary capital to move forward with the construction of a major LNG terminal. The facility's terms include a multi-year draw period for construction costs, followed by conversion to a term loan with defined interest rates (LIBOR plus a margin) and a repayment schedule structured with semi-annual installments and a balloon payment. Additionally, Sabine Pass LNG has implemented significant hedging strategies through swap agreements to mitigate interest rate risk on a substantial portion of the facility, providing a degree of financial predictability for investors.

Key Highlights

  • 1Sabine Pass LNG, L.P. closed an $822 million Senior Secured Credit Facility.
  • 2The facility will fund a substantial majority of the construction costs for the Sabine Pass LNG receiving terminal in Louisiana.
  • 3The credit facility was provided by a syndicate of 47 financial institutions, with HSBC and SG CIB as lead arrangers.
  • 4The financing includes construction draws at LIBOR + 1.5%, converting to a term loan at LIBOR + 1.25% to 1.625% over three years.
  • 5The credit facility has a maximum maturity of ten years from closing, with amortization based on a 19-year mortgage-style profile.
  • 6Sabine Pass LNG entered into swap agreements to hedge interest rate risk on up to $700 million of the facility.
  • 7The hedging strategy fixes LIBOR rates between 4.49% and 4.98% through March 2012.

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