Business Context and Reporting Period
This Form 8-K filing by Cheniere Energy Partners, L.P. ("Cheniere Partners") is dated July 12, 2012. The report details a significant financing milestone for the Sabine Pass LNG liquefaction project, specifically regarding the funding for the first two liquefaction trains.
Key Financial Metrics
- Total Financial Commitments: Approximately $5.4 billion (comprising $3.4 billion in debt and $2 billion in equity).
- Debt Facility (Term Loan A): Upsized to approximately $3.4 billion.
- Debt Facility (Term Loan B): Previously announced $1.25 billion facility withdrawn; syndication of a $750 million facility also withdrawn.
- Interest Rate Structure: LIBOR plus 350 basis points during construction, stepping up to LIBOR plus 375 basis points during operations.
- Maturity: 7 years.
- Additional Commitments: Approximately $200 million in commitments with additional financial institutions are being finalized.
Material Changes
Cheniere Partners has restructured its financing plan for the Liquefaction Project. The company decided to upsize the Term Loan A facility and withdraw the syndication of the previously announced Term Loan B facilities ($1.25 billion and $750 million). Additionally, the purchase of the Creole Trail Pipeline from Cheniere Energy, Inc. has been postponed until after construction begins and financing for the purchase is secured. Management stated this postponement is not expected to delay the project financing.
Outlook and Management Commentary
Charif Souki, Chairman and CEO, noted that the credit facility is one of the larger in the project financing market, reflecting strong transaction fundamentals. The company expects to reach a final investment decision and issue a notice to proceed to Bechtel upon meeting all conditions precedent, including the completion of the financing process and the receipt of all regulatory approvals. The Credit Facility is expected to close by the end of July 2012.
Investor Verification Checklist
- Confirmation of the final closing of the $3.4 billion Credit Facility by the end of July 2012.
- Status of regulatory approvals required to trigger the final investment decision.
- Timeline for the postponed purchase of the Creole Trail Pipeline.
- Finalization of the additional $200 million in commitments from other financial institutions.