8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Material Agreement (Mar 6, 2017)

Filed March 6, 2017For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG), through its subsidiary Sabine Pass Liquefaction, LLC (SPL), announced the successful closing of a $1.35 billion senior secured notes offering on March 6, 2017. These notes, carrying a 4.200% interest rate and maturing in 2028, were issued at a slight discount to par, yielding 4.211%. The offering was conducted as a private placement under Section 4(a)(2) of the Securities Act, utilizing Rule 144A and Regulation S. These funds will be used to further support SPL's operations and development. The notes are senior secured obligations of SPL, ranking pari passu with existing senior secured debt and effectively senior to unsecured debt to the extent of the collateral. While not initially guaranteed, future restricted subsidiaries of SPL are expected to provide guarantees. The indenture includes customary covenants and events of default, with provisions for redemption and potential additional interest payments if registration rights obligations are not met.

Key Highlights

  • 1Cheniere Energy subsidiary, Sabine Pass Liquefaction, LLC (SPL), successfully closed a $1.35 billion offering of 4.200% Senior Secured Notes due 2028.
  • 2The Notes were issued on March 6, 2017, at 99.903% of par, resulting in a yield of 4.211%.
  • 3The offering was a private placement under Section 4(a)(2) of the Securities Act, relying on Rule 144A and Regulation S.
  • 4The Notes are senior secured obligations of SPL and will be guaranteed by future restricted subsidiaries.
  • 5The Notes mature on March 15, 2028, with semi-annual interest payments starting September 15, 2017.
  • 6The indenture includes provisions for redemption, including a make-whole option before September 2027 and a call option thereafter.
  • 7SPL entered into a Registration Rights Agreement, committing to file a registration statement for an exchange offer within 360 days, with potential penalties for non-compliance.

Frequently Asked Questions

This 8-K filing reports the material definitive agreement and creation of a direct financial obligation related to Cheniere's subsidiary, Sabine Pass Liquefaction, LLC (SPL), successfully closing a $1.35 billion offering of senior secured notes.

The notes have an aggregate principal amount of $1.35 billion, bear a fixed interest rate of 4.200% per annum, and mature on March 15, 2028. They were issued on March 6, 2017, as part of a private placement.

While the filing doesn't explicitly state the use of proceeds, such debt issuances are typically used to fund capital expenditures, general corporate purposes, and refinance existing debt. For Cheniere, this likely supports the development and operation of its liquefaction facilities.

The notes are senior secured obligations of SPL. They rank senior in right of payment to any subordinated indebtedness and equal in right of payment with SPL's existing and future senior secured indebtedness that shares the same collateral. They are effectively senior to unsecured debt to the extent of the collateral's value.