8-KMaterial AgreementsFinancial EventsRegulation FD+1

Cheniere Energy, Inc. 8-K Report, Material Agreement (Jul 27, 2005)

Filed July 27, 2005For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K on July 27, 2005, to announce the closing of a significant debt financing. The company successfully sold $325 million in aggregate principal amount of its 2.25% Convertible Senior Notes due 2012. This offering was conducted as a private placement to Credit Suisse First Boston LLC, in reliance on Section 4(2) and Rule 144A of the Securities Act, with an initial principal amount of $300 million and an additional $25 million purchased upon exercise of an option. The Notes mature on August 1, 2012, and are convertible into Cheniere's common stock at an initial conversion price of approximately $35.42 per share. The company has committed to filing a shelf registration statement within 90 days and making it effective by February 22, 2006, to allow for the resale of these Notes and the underlying common stock. This financing provides Cheniere with substantial capital, crucial for its operations and growth initiatives in the energy sector.

Key Highlights

  • 1Cheniere Energy closed a private offering of $325 million in aggregate principal amount of 2.25% Convertible Senior Notes due 2012.
  • 2The Notes were sold to Credit Suisse First Boston LLC on July 27, 2005, under a Purchase Agreement dated July 22, 2005.
  • 3The offering was conducted as a private placement in reliance on Section 4(2) and Rule 144A of the Securities Act.
  • 4The Notes are convertible into Cheniere's common stock at an initial conversion price of approximately $35.42 per share.
  • 5The Notes mature on August 1, 2012, and bear interest at 2.25% per annum, payable semi-annually.
  • 6Cheniere is obligated to file a shelf registration statement for the resale of the Notes and common stock within 90 days of issuance.
  • 7The Notes are unsecured and unsubordinated obligations of Cheniere Energy, Inc., but are structurally subordinate to obligations of its subsidiaries.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the closing of Cheniere Energy's private offering of $325 million in 2.25% Convertible Senior Notes due 2012 and to disclose the material definitive agreements related to this transaction, including the Purchase Agreement, Indenture, and Registration Rights Agreement.

The Notes bear a 2.25% annual interest rate, payable semi-annually, and mature on August 1, 2012. They are convertible into Cheniere's common stock at an initial rate of 28.2326 shares per $1,000 principal amount, implying an initial conversion price of approximately $35.42 per share. The Notes are unsecured and unsubordinated at the company level but subordinate to subsidiary obligations.

The Notes were issued on a private placement basis in reliance on an exemption from registration under the Securities Act of 1933, specifically Section 4(2) and Rule 144A. This allowed Cheniere to raise capital more quickly without the full registration process, although they are obligated to file a shelf registration statement later for resale.

Cheniere is required to file a shelf registration statement with the SEC covering resales of the Notes and the common stock issuable upon conversion. This filing must be made as promptly as practicable, within 90 days of the Notes' issuance, and the registration statement must become effective no later than February 22, 2006.