Tellurian’s Driftwood subsidiary closes $75 million term loans

By Marisa Wong

Morgantown, W.Va., May 28 – Tellurian Inc. indirect wholly owned subsidiary Driftwood Holdings LLC entered into an agreement on May 23 with Wilmington Trust, NA as administrative agent for $75 million of senior secured term loans, according to an 8-K filing with the Securities and Exchange Commission.

The term loans consist of a $60 million term loan that was borrowed in full at closing and an up to $15 million delayed draw term loan that can be borrowed on or before Aug. 31, 2019 as long as specified conditions are met.

The loans mature on the earlier of one year from the closing date or the issuance of the “NTP” (as defined in the lump sum turnkey agreement for the engineering procurement and construction of the Driftwood phase 1 liquefaction facility dated Nov. 10, 2017 between Driftwood LNG LLC and Bechtel Oil, Gas and Chemicals, Inc.). The maturity date is subject to two six-month extensions.

The loans will bear interest at 8% per year payable in cash plus an additional 4% per year payable in cash, in kind or a combination of the two.

No partial prepayment of the loans is permitted under the credit agreement. Upon repayment of the loans in full, the cash interest and fees paid to the lenders must total at least 1.20 times the total principal amount borrowed.

The credit agreement contains a covenant requiring the company to maintain at least an aggregate $30 million balance in accounts constituting collateral.

Tellurian is a natural gas company based in Houston.

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