CHENIERE ENERGY, INC. (NYSEMKT:LNG) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On December14, 2016, Cheniere Corpus Christi Holdings, LLC
(CCH), an indirect, wholly-owned subsidiary of Cheniere
Energy, Inc. (Cheniere), closed a $350 million Working
Capital Facility Agreement, among CCH, as borrower, CCHs
subsidiaries Corpus Christi Liquefaction, LLC (CCL),
Cheniere Corpus Christi Pipeline, L.P. (CCP) and Corpus
Christi Pipeline GP, LLC (CCP GP and together with CCL and
CCP, the Guarantors), as guarantors, The Bank of Nova
Scotia, as Working Capital Facility Agent (the Working Capital
Facility Agent), The Bank of Nova Scotia and Sumitomo Mitsui
Banking Corporation, as Issuing Banks, Mizuho Bank, Ltd., as
Swing Line Lender, and the lenders party thereto from time to
time (the Working Capital Facility). The lenders and their
affiliates have provided and may provide, from time to time in
the future, certain financial services to CCH and its affiliates,
for which they may receive advisory or transaction fees, as
applicable, of the nature and in amounts customary in the
industry for these financial services.
The Working Capital Facility is intended to be used for loans
(Working Capital Loans) to, and the issuance of letters of
credit (Letters of Credit) on behalf of, CCH, as well as
for swing line loans to CCH (Swing Line Loans), for
certain working capital requirements related to developing and
placing into operation CCLs natural gas liquefaction facilities
and CCPs natural gas pipeline and related facilities near Corpus
Christi, Texas (the CCL Project).
The Working Capital Facility will be used for (i)payment of gas
purchase, transportation and storage expenses (including to meet
credit support requirements under gas purchase, transportation or
storage agreements); (ii)funding of debt service reserves;
(iii)other working capital and other general corporate purposes;
and (iv)the payment of transaction fees and expenses. Up to $75
million of the Working Capital Facility may be used for general
corporate purposes of CCH (the General Corporate Purposes
Sublimit). Swing Line Loans may be made in an amount of up to
$25 million (the Swing Line Sublimit). The Swing Line
Sublimit is part of, and not in addition to, the entire aggregate
principal amount of the Working Capital Facility. The entire
amount of the Working Capital Facility will be available for the
issuance of Letters of Credit.
The Working Capital Facility allows CCH to request incremental
commitments of up to the maximum allowed under the Common Terms
Agreement (as defined below) for the Working Capital Facility,
subject to customary conditions precedent. Upon any increase in
the size of the Working Capital Facility, the General Corporate
Purposes Sublimit will be increased in an aggregate amount of up
to $250 million.
Conditions Precedent to Extensions of Credit
Advances and issuances of letters of credit under the Working
Capital Facility are subject to customary conditions precedent,
including the absence of defaults, bring-down of certain
representations and warranties, perfection of security interests,
payment of applicable fees and expenses, and certifications as to
construction progress of the CCL Project.
Interest and Fees
Loans under the Working Capital Facility, including Working
Capital Loans, Swing Line Loans and any loans deemed made in
connection with a draw upon any Letter of Credit (LC
Loans) (collectively, the Revolving Loans) will bear
interest at a variable rate per annum equal to LIBOR or the base
rate (the highest of (a) the federal funds rate plus 0.50%, (b)
the prime rate and (c) one-month LIBOR plus 0.50%), plus the
applicable margin. The applicable margin for LIBOR Revolving
Loans ranges from 1.50% to 2.0%, and the applicable margin for
base rate Revolving Loans ranges from 0.50% to 1.00%, in each
case, based on CCHs debt ratings then in effect. Interest on
Swing Line Loans, Working Capital Loans and LC Loans is due and
payable on the date such loans become due. Interest on LIBOR
Revolving Loans is also due and payable at the end of each LIBOR
period, and interest on base rate Revolving Loans is also due and
payable at the end of each calendar quarter.
CCH will pay (i)a commitment fee on the average daily amount of
the excess of the total commitment amount over the principal
amount outstanding without giving effect to any outstanding Swing
Line Loans in an amount equal to an annual rate of 40% of the
applicable margin for LIBOR Revolving Loans; (ii)a letter of
credit fee equal to an annual rate equal to the applicable margin
for LIBOR Revolving Loans on the undrawn portion of all letters
of credit issued under the Working Capital Facility; and (iii) a
letter of credit fronting fee to each Issuing Bank in an amount
equal to an annual rate of 0.20% of the undrawn portion of all
letters of credit issued by such Issuing Bank. Each of these fees
is payable quarterly in arrears. In the event that draws are made
upon any letters of credit issued under the Working Capital
Facility and CCH does not elect for such draw to be deemed an LC
Loan (an LC Draw), CCH is required to pay the full amount
of the LC Draw on or prior to 12:00 p.m., New York City time, on
the business day immediately succeeding its timely receipt of
notice of the LC Draw. Any such LC Draw shall bear interest at an
annual rate equal to the base rate plus 2.0%.
In connection with the Working Capital Facility, CCH will pay
upfront fees to the agents and lenders under the Working Capital
Facility together with additional transaction fees in the
aggregate amount of approximately $8.0 million. Annual
administrative fees must also be paid to the Working Capital
Facility Agent and the Swing Line Lender under the Working
Capital Facility.
Repayments
The Working Capital Facility matures on December14, 2021 (the
Maturity Date). LC Loans have a term of up to one year.
Swing Line Loans terminate upon the earliest to occur of (a)the
Maturity Date or earlier termination of the Working Capital
Facility, (b)the date 15 days after such Swing Line Loan is made
and (c)the first borrowing date for a Working Capital Loan or
Swing Line Loan occurring at least four business days following
the date such Swing Line Loan was made.
CCH is required to reduce the aggregate outstanding principal
amount of all Working Capital Loans to zero for a period of five
consecutive business days at least once each year. CCH may prepay
the Revolving Loans at any time without premium or penalty upon
three business days notice.
Covenants and Events of Default
The Working Capital Facility generally incorporates the
representations, warranties, covenants, reporting requirements
and mandatory prepayment provisions of the Common Terms
Agreement, dated as of May13, 2015, among CCH and certain other
parties thereto and Socit Gnrale, as security trustee and
intercreditor agent (the Common Terms Agreement), which
was previously disclosed in Chenieres Current Report on Form 8-K,
filed with the Securities and Exchange Commission on May13, 2015.
Upon the discharge of all debt governed by the Common Terms
Agreement (other than the Working Capital Facility), the
representations, warranties and covenants in the Common Terms
Agreement will no longer apply and will be replaced with the
representations, warranties and covenants contained in the
Working Capital Facility, which address matters customary in
project financings and are generally less restrictive than those
in the Common Terms Agreement. The Working Capital Facility
includes customary events of default which are subject to
customary grace periods and materiality standards.
Collateral
The Revolving Loans, CCHs existing term loan facility,
obligations under the interest rate protection agreement entered
into in connection with the term loan facility, and CCHs senior
notes (collectively, the CCH Secured Obligations) are
secured on a pari passu basis by a first priority lien
(subject to customary permitted encumbrances) in substantially
all of the assets of CCH and the Guarantors. In addition, the CCH
Secured Obligations are secured by a pledge of all of the
membership interests in CCH and each of the Guarantors. CCH is
also required to establish and maintain certain deposit accounts
which are subject to the control of Socit Gnrale, as security
trustee. The Revolving Loan proceeds and other receipts will be
deposited into these accounts or applied directly for the
purposes for which they are borrowed. The liens securing the CCH
Secured Obligations are evidenced by customary mortgage and other
security documents and are subject to customary intercreditor
arrangements.
The foregoing description of the Working Capital Facility does
not purport to be complete and is qualified in its entirety by
reference to the full text of the agreement, which is filed as
Exhibit 10.1 to this report and incorporated herein by reference.
Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth under Item1.01 of this Current Report
on Form 8-K is incorporated by reference into this Item2.03.
| Item9.01 | Financial Statements and Exhibits. |
d) Exhibits
|
Exhibit Number |
Description |
|
| 10.1 |
Working Capital Facility Agreement, dated as of December 14, 2016, among CCH, the Guarantors, The Bank of Nova Scotia, as Working Capital Facility Agent, The Bank of Nova Scotia and Sumitomo Mitsui Banking Corporation, as Issuing Banks, Mizuho Bank, Ltd., as Swing Line Lender, and the lenders party thereto from time to time. |
About CHENIERE ENERGY, INC. (NYSEMKT:LNG)
Cheniere Energy, Inc. is an energy company primarily engaged in liquefied natural gas (LNG) related businesses. The Company operates through two segments: LNG terminal business and LNG and natural gas marketing business The Company owns and operates the Sabine Pass LNG terminal in Louisiana through its ownership interest in and management agreements with Cheniere Energy Partners, L.P. (Cheniere Partners), which is a publicly traded limited partnership. The Company owns approximately 100% of the general partner interest in Cheniere Partners and over 80% of Cheniere Energy Partners LP Holdings, LLC (Cheniere Holdings), which is a publicly traded limited liability company that owns approximately 56% limited partner interest in Cheniere Partners. The Sabine Pass LNG terminal is located on the Sabine-Neches Waterway less than four miles from the Gulf Coast. CHENIERE ENERGY, INC. (NYSEMKT:LNG) Recent Trading Information
CHENIERE ENERGY, INC. (NYSEMKT:LNG) closed its last trading session down -0.77 at 40.85 with 2,721,051 shares trading hands.