Moody’s gives Sabine Pass notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to Sabine Pass Liquefaction, LLC's new $1 billion of senior secured notes due 2026 and affirmed the Ba2 ratings on its $13.1 billion of senior secured bank loans and bonds.

The outlook is stable.

Net proceeds from the offering are expected to repay Sabine Pass’ bank loan borrowings by roughly $800-900 million with the remainder used to pay for increased interest during construction as well as transaction costs.

Moody’s said the main credit factors supporting Sabine Pass’ Ba2 senior secured ratings are its long-term contracts with investment grade off-takers, significant construction progress made to date anticipated strong cash flows once steady state operation is achieved and engineering, procurement, and construction (EPC) contracts with Bechtel Oil, Gas and Chemicals, Inc. that mitigate some construction risk.

Sizeable third party equity investment of $2 billion, mostly traditional project finance protections for the senior secured bank loans, and the use of existing infrastructure are also considered positive factors, the agency said.

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