8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Material Agreement (Jun 14, 2016)

Filed June 14, 2016For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG), through its subsidiary Sabine Pass Liquefaction, LLC (SPL), announced the closing of a $1.5 billion debt financing on June 14, 2016. This issuance consists of 5.875% Senior Secured Notes due 2026, sold via a private placement under Section 4(a)(2) of the Securities Act, Rule 144A, and Regulation S. These notes are senior secured obligations of SPL, ranking equally with existing senior indebtedness and effectively senior to unsecured debt up to the value of the collateral. The financing will mature on June 30, 2026, with semi-annual interest payments beginning December 31, 2016. The company has also entered into a Registration Rights Agreement, committing to file a registration statement for an exchange offer of these notes within 360 days, with potential penalties for non-compliance.

Key Highlights

  • 1Cheniere Energy subsidiary, Sabine Pass Liquefaction (SPL), successfully closed a $1.5 billion offering of 5.875% Senior Secured Notes due 2026.
  • 2The notes were issued on June 14, 2016, with a maturity date of June 30, 2026.
  • 3The financing was conducted as a private placement under Section 4(a)(2) of the Securities Act and Rule 144A/Regulation S.
  • 4The notes are senior secured obligations of SPL, with covenants that include limitations on additional indebtedness, investments, and dividends.
  • 5SPL has agreed to register these notes for resale under a Registration Rights Agreement, with a deadline of 360 days post-issuance.
  • 6The issuance represents a significant debt financing event for Cheniere's liquefaction project development.

Frequently Asked Questions

This debt issuance is intended to finance Cheniere Energy's ongoing project development, specifically for its liquefaction facilities, as detailed in the company's filings related to Sabine Pass Liquefaction, LLC.

The notes have a principal amount of $1.5 billion, a coupon rate of 5.875% per annum, and mature on June 30, 2026. Interest is payable semi-annually starting December 31, 2016. They are senior secured obligations of Sabine Pass Liquefaction, LLC.

The notes were sold on a private placement basis in reliance on Section 4(a)(2) of the Securities Act and Rule 144A/Regulation S, which allows for the offering and sale of securities to certain sophisticated investors without the need for a full public registration at the time of issuance.

The Registration Rights Agreement obligates Cheniere to file a registration statement with the SEC to allow for the resale of these privately placed notes, or an exchange offer for registered notes, within 360 days. This provides liquidity and potential future marketability for the investors holding these notes.