8-KMaterial AgreementsFinancial EventsSecurities & Listing+3

Cheniere Energy, Inc. 8-K Report, Material Agreement (May 13, 2015)

Filed May 13, 2015For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K on May 13, 2015, detailing significant financing activities related to its Corpus Christi Liquefaction Project. The company's subsidiary, Cheniere CCH HoldCo II, LLC, issued $1.0 billion in 11% Senior Secured Notes due 2025. These notes are secured by pledged equity interests in the subsidiary and are convertible into Cheniere common stock, with registration rights provided to holders. Additionally, Cheniere Corpus Christi Holdings, LLC, the project's borrower, entered into a Term Loan Facility Agreement for approximately $11.5 billion to finance the construction and operation of two initial natural gas liquefaction trains, with potential for a third train. This debt financing is secured by substantially all assets of the loan parties and their equity interests. The company also entered into an Equity Contribution Agreement, committing to significant equity funding for the project, with provisions for additional funding based on project development and debt levels.

Key Highlights

  • 1Issuance of $1.0 billion in 11% Senior Secured Notes due 2025 by subsidiary Cheniere CCH HoldCo II, LLC.
  • 2The Notes are convertible into Cheniere Energy common stock and secured by pledged equity interests in the subsidiary.
  • 3Entry into a $11.5 billion Term Loan Facility Agreement for the Corpus Christi Liquefaction Project.
  • 4The Term Loan Facility is secured by a first priority lien on substantially all assets of the loan parties involved in the Corpus Christi Liquefaction Project.
  • 5Cheniere Energy committed to providing approximately $2.64 billion in equity funding for the Corpus Christi Liquefaction Project via an Equity Contribution Agreement.
  • 6Final Investment Decision (FID) approved for Trains 1 and 2 of the Corpus Christi Liquefaction Project.
  • 7Notice to Proceed issued to Bechtel for the construction of Trains 1 and 2 of the Corpus Christi Liquefaction Project.

Frequently Asked Questions

The issuance of $1.0 billion in 11% Senior Secured Notes by Cheniere CCH HoldCo II, LLC represents a material debt financing for Cheniere Energy. These notes are secured by the equity interests of the subsidiary and are convertible into Cheniere's common stock, providing potential equity dilution for existing shareholders and registration rights for noteholders to sell shares upon conversion.

The $11.5 billion Term Loan Facility Agreement, entered into by Cheniere Corpus Christi Holdings, LLC, is intended to finance the development, construction, and operation of the Corpus Christi Liquefaction Project, specifically for the first two natural gas liquefaction trains. The debt is secured by substantially all assets of the project's loan parties, indicating a significant leverage for the project.

Cheniere Energy committed to providing approximately $2.64 billion in equity funding for the Corpus Christi Liquefaction Project through an Equity Contribution Agreement. This funding is bifurcated into first-tier and second-tier equity contributions and is subject to certain conditions related to project development and debt levels, ensuring a significant equity stake alongside the substantial debt financing.

The approval of the Final Investment Decision (FID) for Trains 1 and 2 of the Corpus Christi Liquefaction Project and the subsequent issuance of a Notice to Proceed to Bechtel mark critical milestones. These actions confirm Cheniere's commitment to advancing the project and commencing construction, signaling confidence in the project's viability and Cheniere's progression in developing its liquefaction infrastructure.