Summary
Cheniere Energy, Inc. (LNG) filed an 8-K on May 31, 2007, to report a material definitive agreement related to a new Credit Agreement. A newly formed subsidiary, Cheniere Subsidiary Holdings, LLC, secured a $400 million loan facility. The full amount was drawn on May 31, 2007, maturing on May 31, 2012. The proceeds are earmarked for general corporate purposes, including a significant portion allocated to repurchasing the Company's outstanding common stock and covering associated fees. The loan carries a fixed interest rate of 9.75% per annum, increasing to 11.75% in the event of default. The loan does not amortize prior to maturity but includes declining prepayment premiums and mandatory prepayments triggered by asset dispositions, certain distributions, or a change of control. The facility is secured by a pledge of various assets, including subordinated units of Cheniere Energy Partners, L.P. (CQP) and equity interests in subsidiaries, subject to existing obligations to Crest Energy, L.L.C.
Key Highlights
- 1Cheniere Energy, Inc. secured a $400 million credit facility through a newly formed subsidiary, Cheniere Subsidiary Holdings, LLC.
- 2The full $400 million was drawn on May 31, 2007, with a maturity date of May 31, 2012.
- 3Loan proceeds will be used for general corporate purposes, with a stated intention to fund share repurchases.
- 4The loan carries a fixed interest rate of 9.75%, increasing to 11.75% upon default.
- 5The credit facility includes a declining prepayment premium structure and mandatory prepayment provisions tied to asset sales, distributions, or change of control events.
- 6The loan is secured by a pledge of specific subsidiary equity interests and partnership units, including subordinated units of CQP, subject to a priority lien for Crest Energy, L.L.C.
- 7The agreement imposes various covenants on the Borrower, Company, and related subsidiaries, restricting actions related to collateral, debt, and affiliate transactions.