Cheniere aims at credit due before 2020
Cheniere Energy (ticker: LNG, Cheniere.com) announced that it has engaged 13 financial institutions in order to structure and arrange senior secured credit facilities in an aggregate principal amount of up to approximately $2.8 billion, according to a company press release.
Cheniere hopes to use the proceeds from the new credit facility to redeem or repay approximately $1.7 billion in senior secured notes due 2016, prepay $400 million on a senior secured term loan due 2017 by Cheniere Creole Trail Pipeline and redeem or repay the $420 million in senior secured notes due 2020 issued by Sabine Pass LNG.
The company’s total debt stands at $24.16 billion, but the new plan with the financial institutions would pay off everything Cheniere owes prior to $3.1 billion of debt due in 2021. The sizable portion of the company’s total debt will come due in 2022, when $11.6 billion will become due.
The 13 financial institutions and other participants are The Bank of Tokyo-Mitsubishi UFJ, Ltd., ABN AMRO Capital USA LLC, Société Générale, Industrial and Commercial Bank of China Limited, New York Branch, Intesa Sanpaolo, S.P.A. New York Branch, JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Morgan Stanley Senior Funding, Inc., Bank of America, N.A., Credit Suisse, HSBC Bank USA, N.A. and Commonwealth Bank of Australia.
The decision to repay portions of its debt ahead of schedule could be part of a new direction the company is taking since the company’s board of directors removed Charif Souki as CEO. It is believed that Souki’s plans to reinvest free cash flow into other parts of the energy value chain may have put him at odds with the growing presence of activist shareholder Carl Icahn. Two board members have taken over management duties until a search for a new CEO has concluded, according to the company.
The first LNG export cargo coming soon
Cheniere expects that the first LNG cargo to leave its facility at Sabine Pass in late February or March of this year. It was initially expected to occur this month, but was delayed following “instrumentation issues,” according to a company press release.
Sabine Pass will include six liquefaction trains, each with nominal production capacity of approximately 4.5 million tons per annum of LNG, once completed. Cheniere currently has six third-party LNG sale and purchase agreements that equate to approximately 19.75 mtpa of LNG.