Cheniere closes amended $4 billion term loan, $1.5 billion revolver

By Marisa Wong

Los Angeles, June 22 – Cheniere Corpus Christi Holdings, LLC as borrower and Cheniere Corpus Christi Pipeline, LP, Corpus Christi Pipeline GP, LLC and Corpus Christi Liquefaction, LLC as guarantors, each indirectly wholly owned by Cheniere Energy, Inc., entered into a second amended and restated term loan facility agreement on June 15 with Societe Generale, as agent, according to an 8-K filing with the Securities and Exchange Commission.

The term loan agreement amends and restates the borrower’s existing term loan facility agreement to provide for aggregate commitments of about $4 billion, including about $3.8 billion of commitments incremental to outstanding amounts under the facility.

Borrowings under the term loan are being used to fund roughly half of the total expected cost to develop, construct and place into service the borrower’s LNG Corpus Christi stage 3 liquefaction project, the associated pipeline expansion and other infrastructure at or near the project and for related business purposes.

On June 15, the companies also entered into a second amended and restated working capital facility agreement with Bank of Nova Scotia as agent.

The working capital facility agreement amends and restates the borrower’s existing working capital facility agreement to provide for $300 million of incremental commitments, increasing the total committed amount under the agreement to $1.5 billion.

The working capital loans will be used for working capital requirements related to the operation of the borrower’s Corpus Christi natural gas liquefaction facilities and Corpus Christi natural gas pipeline and related facilities near Corpus Christi, Tex. Up to $300 million may be used for general corporate purposes.

The entire amount of the working capital facility will be available for the issuance of letters of credit.

In addition, the companies entered into a second amended and restated common terms agreement on June 15 with the term loan facility agent, the working capital facility agent and Societe Generale as intercreditor agent.

Interest and fees

Term loans will bear interest at term SOFR plus a credit spread adjustment of 10 basis points plus an applicable margin of 150 bps.

Revolving loans under the working capital facility will bear interest at term SOFR plus a credit spread adjustment of 10 bps plus an applicable margin ranging from 100 bps to 150 bps, depending on the borrower’s debt credit ratings.

The borrower is required to pay upfront fees to the agents and lenders under the term loan and the revolver, together with additional transaction fees and expenses, in the aggregate amount of about $40 million. Some administrative fees must also be paid to the agents under the finance documents, including the term loan facility agent and the working capital facility agent.

The term loan provides for a commitment fee calculated at a rate per annum equal to 35% of the margin for term SOFR loans, multiplied by the outstanding debt commitments.

The working capital facility provides for the following fees: a commitment fee on the average daily amount of the excess of the total commitment amount over the principal amount outstanding in an amount equal to an annual rate ranging from 10 bps to 20 bps, depending on the borrower’s debt credit ratings; a letter-of-credit fee equal to an annual rate ranging from 100 bps to 150 bps, depending on the borrower’s debt credit ratings; and a letter-of-credit fronting fee to each issuing bank that has issued fronted letters of credit in an amount equal to an annual rate of 0.125% of the undrawn portion of all letters of credit issued by such issuing bank.

In the event that draws are made upon any letters of credit issued under the working capital facility and the borrower elects for that draw to be deemed an LoC loan, that LoC loan will be a base rate revolving loan and may be converted to a term SOFR loan under certain conditions. LoC loans have a term of up to one year. If the borrower does not elect for an LoC draw to be deemed an LoC loan, the borrower is required to pay the full amount of the draw plus interest on that amount at a rate per annum equal to the base rate plus 200 bps on or prior to noon ET on the business day immediately succeeding its timely receipt of notice of the LoC draw.

Repayment

The maturity date for the term loan will occur on the earlier of (i) June 15, 2029 and (ii) the date that is two years after the substantial completion of the last train of the stage 3 terminal facilities, subject to extension.

A portion of the principal of loans made under the term loan must be repaid in quarterly installments, beginning on the earlier of (i) the first quarterly payment date occurring more than three calendar months following project completion and (ii) Jan. 31, 2028.

The revolver matures on June 15, 2027. The borrower may prepay the revolving loans at any time without premium or penalty.

The common terms agreement provides for mandatory repayments of loans under customary circumstances, including mandatory repayments with the proceeds of certain insurance payments and condemnation awards; in connection with certain prepayment events triggered under LNG SPAs as a result of coverage ratios falling below a specified threshold; change of control; if it becomes unlawful for the lender to fund or maintain loans; on receipt of proceeds from the sale of project property; and in the case of failures to meet restricted payments conditions.

The working capital facility also provides for mandatory repayments of loans under customary circumstances, including mandatory repayments in connection with prepayment events triggered under LNG SPAs as a result of coverage ratios falling below a specified threshold; change of control; and if it becomes unlawful for the lender to fund or maintain loans.

Covenants

The common terms agreement and related finance documents include affirmative and negative covenants applicable to the term loan and the working capital facility, including, among others, covenants relating to compliance with laws; conditions to the making of restricted payments, including distributions; maintenance of minimum insurance; maintenance of material project agreements related to the stage 3 terminal facilities with Bechtel Energy Inc.; limitations on indebtedness, guarantees, liens and investments; maintenance of certain interest rate hedging arrangements; and maintenance of and compliance with various permits. These covenants are subject to specified materiality qualifiers, reasonableness standards, thresholds and grace periods.

Additional debt

The borrower may incur additional senior secured or unsecured debt consisting of working capital debt; replacement senior debt; expansion senior debt; any indebtedness with respect to which the borrower certifies to the intercreditor agent that the incurrence thereof produces a fixed projected debt service coverage ratio of 1.4 times; and after the discharge date under the term loan, any indebtedness with respect to which the borrower delivers a rating reaffirmation to the intercreditor agent.

Cheniere is a Houston-based LNG company.

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