Who are the main lenders involved in these credit facilities?

The lenders include a syndicate of commercial banks for the Term Loan A, facilitated by Société Générale. Additionally, The Export-Import Bank of Korea (KEXIM) and other lenders are involved through the KEXIM Direct Agreement, KEXIM Covered Agreement, and the KSURE Covered Agreement, facilitated by Shinhan Bank New York Branch and The Korea Development Bank, New York Branch, respectively.

What are the key financial terms of these credit facilities, such as interest rates and fees?

Loans will bear interest at variable rates (LIBOR or base rate plus an applicable margin ranging from 1.30% to 1.75%). There are also upfront fees of approximately $90.2 million, commitment fees on undrawn amounts, annual administrative fees, and insurance/guarantee premiums of 0.45% on drawn amounts for covered tranches.

Are there any significant restrictions or covenants associated with these credit facilities?

Yes, the credit facilities contain customary affirmative and negative covenants. These include restrictions on incurring additional debt or liens, engaging in asset sales, certain modifications to EPC contracts, and limitations on making equity distributions before the completion of the second train and meeting specific debt service coverage ratios. They also require maintaining interest rate protection for at least 65% of senior secured debt.

LNG 8-K: Material Agreements & Financial Events

Q: What is the primary purpose of these new credit facilities?

The primary purpose of these new credit facilities, totaling $4.6 billion, is to fund the development, construction, and commissioning of the first five of six planned natural gas liquefaction trains at Cheniere's Sabine Pass LNG terminal in Louisiana.

Summary

On June 30, 2015, Cheniere Energy, Inc. (LNG), through its subsidiary Sabine Pass Liquefaction, LLC (SPL), significantly advanced its Sabine Pass LNG terminal expansion by securing new credit facilities totaling $4.6 billion. These facilities replace existing debt and are earmarked to fund the development, construction, and commissioning of the first five of six planned liquefaction trains at the Sabine Pass LNG terminal in Cameron Parish, Louisiana. Each train is designed with a nominal production capacity of 4.5 million tonnes per annum. The financing comprises four distinct credit facilities: a $2.85 billion Term Loan A, a $600 million KEXIM Direct Facility, a $400 million KEXIM Covered Facility, and a $750 million KSURE Covered Facility, all governed by a Common Terms Agreement. The funds will support the substantial capital expenditures required for this phase of the project, bringing Cheniere closer to its goal of becoming a major LNG exporter.

Key Highlights

1Cheniere's subsidiary, Sabine Pass Liquefaction, LLC, secured $4.6 billion in new credit facilities on June 30, 2015.
2These funds are designated for the construction of the first five of six planned natural gas liquefaction trains at the Sabine Pass LNG terminal.
3The new facilities replace existing credit arrangements for SPL.
4The financing includes a $2.85 billion Term Loan A, a $600 million KEXIM Direct Facility, a $400 million KEXIM Covered Facility, and a $750 million KSURE Covered Facility.
5Advances under these facilities are subject to customary conditions precedent, including project construction progress and necessary governmental approvals.
6The loans will bear variable interest rates (LIBOR or base rate plus a margin) with associated fees and premiums.
7Repayment is structured with quarterly installments and a balloon payment at maturity, expected by December 31, 2020, or two years after project completion.
8The company also issued a notice to proceed for the construction of the fifth liquefaction train.

Cheniere Energy, Inc. 8-K Report, Material Agreement (Jul 1, 2015)

Summary

Key Highlights

Frequently Asked Questions