Cheniere announces redemption of $300 million convertibles due 2025

By Devika Patel

Knoxville, Tenn., Feb. 25 – Cheniere Energy, Inc. plans to redeem $300 million of subsidiary Corpus Christi Holdco’s convertible notes due 2025.

“With respect to the Corpus Christi Holdco converts, we have entered into an agreement with EIG to redeem $300 million of the outstanding balance of the Corpus Christi Holdco convertible notes due 2025 for cash,” executive vice president and chief financial officer Michael Wortley said on the company’s fourth quarter and year ended Dec. 31, 2019 earnings conference call on Tuesday.

“The outcome of this transaction is the reduction of notional debt and the prevention of over 6 million shares of equity dilution.

“Pro forma for this transaction, there will be approximately $1.3 billion of the CCH Holdco convertible notes outstanding, and we will be prudent in managing the balance of these notes.

“We maintain the option to utilize cash to further reduce the outstanding balances of the notes over the next six months,” he said.

Last quarter, the company used the proceeds from a $1.5 billion November sale of 3.7% notes due 2029 to prepay a portion of the debt under subsidiary Cheniere Corpus Christi Holdings, LLC’s credit facility.

“In full year 2019, we prepaid $153 million of outstanding borrowings under the Corpus credit facility,” Wortley said.

Consolidated adjusted EBITDA was $987 million for the quarter and $2.95 billion for the year.

Cash and cash equivalents were $2,474,000,000 as of Dec. 31, 2019, compared to $981 million as of Dec. 31, 2018.

Net long-term debt was $30,774,000,000 as of Dec. 31, 2019, compared to $28,179,000,000 as of Dec. 31, 2018.

On Nov. 6, Cheniere Corpus Christi Holdings priced an upsized $1.5 billion of 10-year senior secured notes (Ba1/BBB-/BBB-) at 99.925 to yield 3.709%.

The notes priced at a spread of 190 basis points over Treasuries, on the tight side of guidance.

The Rule 144A and Regulation S deal was upsized from $1 billion.

BofA Securities Inc., Goldman Sachs & Co. LLC, ING Financial Markets LLC and Scotia Capital (USA) Inc. were the bookrunners.

The company held fixed income investor calls on Nov. 5 for the split-rated offering.

Proceeds will be used to refinance or retire a portion of debt under Cheniere Corpus Christi's term loan due 2024.

Cheniere is a liquefied natural gas company based in Houston.

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