Bank of China contributes $146.15 million USD to a $8.4 billion USD syndicated loan for Trains 1 and 2 of the Corpus Christi Liquefaction Project (Linked to Record ID#107248, #107249, and #107250)

Project narrative

On May 13, 2015, a syndicate of 32 banks — including the New York Branch of the Bank of China (BOC) and the New York Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a $11,499,769,810 USD syndicated term loan facility agreement with Cheniere Corpus Christi Holdings, LLC — a Delaware-incorporated special purpose vehicle (SPV) wholly-owned by Delaware-incorporated SPV Cheniere CCH HoldCo I, LLC, which is wholly-owned by Delaware-incorporated SPV Cheniere CCH Holdco II, LLC, itself wholly owned by Cheniere Energy, Inc., a Delaware-incorporated American liquefied natural gas (LNG) company and major exporter headquartered in Houston, Texas and listed on NYSE American — for Trains 1 and 2 of the Corpus Christi Liquefaction Project. This term loan facility consisted of $8,403,714,178.62 USD in financing for the first phase (Trains 1 and 2) divided into four tranches, to be drawn so that the first tranche would be fully used before the second was drawn: $500,000,000 USD Tranche 1; $800,000,000 USD Tranche 2; $800,000,000 USD Tranche 3; and $6,303,714,178.62 USD Tranche 4. This term loan facility also consisted of $3,096,055,631.43 USD in financing for the second phase (Train 3). Disbursements under the term loan facility were subject to customary conditions precedent, but the financing for the second phase was only available to be drawn subject to the satisfaction of incremental customary conditions precedent related to the construction of the third train, including, securing additional qualifying liquefied natural gas (LNG) sale and purchase agreements (SPA) sufficient to support the incremental $3.1 billion USD in commitments, issuing a notice to proceed to construct the third Train, meeting certain incremental equity funding commitments, delivery of a base case financial model showing a fixed projected debt service coverage ratio of 1.55x, and a maximum senior debt to equity ratio of 75:25 taking into account the incremental debt, and other customary conditions. If these conditions were not met on or before December 31, 2015, the $3,096,055,631.43 USD in financing for the second phase would be cancelled. This term loan facility carried a maturity period of seven years and a final maturity date of May 13, 2022 (it would be two years after project completion date if earlier than May 13, 2022), with a repayment schedule of quarterly installments beginning on the earlier of 1) the first quarterly payment date three months following project completion or 2) a set date determined by reference to the date under which a certain LNG buyer linked to the last train to become operational was entitled to terminate its sale and purchase agreement (SPA) for failure to achieve the date of first commercial delivery for that agreement. Scheduled amortization would be based upon a 19-year tailored amortization, commencing the first full quarter after the project completion and designed to achieve a minimum projected fixed debt service coverage ratio of 1.55x. There were mandatory repayments under customary circumstances. Borrowings under the term loan facility carried a variable interest rate per annum based on LIBOR or an alternate base rate based on the agent's prime rate plus an applicable margin of 2.25% for LIBOR loans and 1.25% for base rate loans prior to project completion, then increasing to 2.50% for LIBOR loans and 1.50% for base rate loans after completion. Interest on LIBOR loans was due and payable at the end of each applicable interest period, while interest on base rate loans was due and payable at the end of each calendar quarter. The facility included certain upfront fees to the agents and lenders that, together with additional transaction fees and expenses amounted to approximately $334 million USD, administrative fees to the agents, and a commitment fee calculated at a rate per annum equal to 40% of the margin for LIBOR loans (0.9%), multiplied by the outstanding debt commitments. The facility included customary representations and affirmative and negative covenants for project finance facilities, including compliance with laws; conditions to the making of restricted payments, including dividends (subject to other conditions); maintenance of minimum insurance; maintenance of material project agreements; limitations on indebtedness, guarantees, liens, and investments; maintenance of certain interest rate hedging arrangements; maintenance of a historical debt service coverage ratio of 1.15x; and maintenance of and compliance with various permits. The borrower was permitted to incur additional senior secured or unsecured indebtedness consisting of working capital debt, replacement senior debt, and permitted development expenditures senior debt, so long as, among other requirements, there was no event of default or unmatured event of default and the updated base case forecast demonstrated a fixed projected debt service coverage ratio of 1.55x (for replacement senior debt) or 1.50x (for permitted development expenditures senior debt and expansion senior debt). The borrower could only incur expansion senior debt for development of all trains with the consent of all lenders. The facility included customary events of default. Corpus Christi Liquefaction, LLC (CCL), Cheniere Corpus Christi Pipeline, L.P. (CCP), and Corpus Christi Pipeline GP, LLC (CCP GP) — three Delaware-incorporated SPVs all indirectly or directly wholly owned by Cheniere Corpus Christi Holdings, LLC — issued guarantees for this facility. Loans under the term loan facility were secured (i.e. collateralized) under the Common Security and Account Agreement dated as of May 13, 2015 by Cheniere Corpus Christi Holdings, CCL, CCP, and CPP GP, with Société Générale as security trustee, and Mizuho Bank as account bank; the collateral included a first priority lien in substantially all of the assets of Cheniere Corpus Christi Holdings, CCL, CCP, and CPP GP, a pledge of all the equity interests in CCL, CCP, and CCP GP, and a mortgage over the real property of CCL and CCP. The common security and account agreement also required Cheniere Corpus Christi Holdings to establish and maintain certain deposit accounts, subject to the control of the security trustee. The term loan was furthered secured under Pledge Agreement dated May 13, 2015, among Cheniere CCH HoldCo I, LLC and Société Générale, where Cheniere CCH HoldCo I pledged its equity interest in Cheniere Corpus Christi Holdings as security. On May 13, 2015, Cheniere Corpus Christi Holdings, and CCL, CCP, CCP GP (as guarantors) also entered into the Common Terms Agreement with Société Générale as facility agent. The proceeds of the term loan were to be used by the borrower to facilitate the development, construction, operation and maintenance of a natural gas liquefaction and export facility and related and supporting infrastructure in San Patricio County and Nueces County in the vicinity of Portland, Texas, on the La Quinta Channel in the Corpus Christi Bay, the the Corpus Christi Liquefaction Project; specifically, the $8,403,714,178.62 USD debt was to fund Train 1 and 2 (stage 1), while the $3,096,055,631.43 USD portion was to fund Train 3 (stage 2). The Corpus Christi Liquefaction Project was a greenfield LNG project initially planned as a three operational liquefaction train complex, each with a nominal production capacity of 4.5 million tons per annum (mtpa) of LNG (an aggregate nameplate capacity of 13.5 mtpa) and an export terminal with two docks/berths and three containment tanks each with the capacity to store 160,000 cubic meters of LNG situated 25 feet above sea level on a 1,000-acre plot on the La Quinta Ship Channel, along the north shore of Corpus Christi Bay in Corpus Christi, San Patricio County, Texas with 15 nautical miles from the coast the Gulf of Mexico, and an associated 22-mile, 48-inch 2.75 billion cubic feet per day (bcf/d) Corpus Christi Pipeline connecting the terminal to interstate and intrastate natural gas pipelines in Sinton, Texas. Stage 1 included two LNG trains, two tanks, one complete, and a second partial berth, while Stage 2 (Train 3) included one LNG train, one additional tank, and the completion of the second berth. The entire project had an estimated cost in 2013 of between $10.5 billion USD and $11.0 billion USD. BOC contributed $146.15 million USD to the $8.4 billion USD for Trains 1 and 2, as captured by Record ID#107245. ICBC contributed $392.67 million USD to the $8.4 billion USD for Trains 1 and 2, as captured by Record ID#107248. In addition to BOC and ICBC, the following lenders contributed to the $8.4 billion USD debt for Trains 1 and 2: ABN AMRO Capital USA LLC ($146.15 million USD), Bank of America, N.A. ($392.67 million USD), the New York Branch of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) ($215.97 million USD), BNP Paribas S.A. ($392.67 million USD), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($365.39 million USD), Crédit Agricole Corporate and Investment Bank (CACIB) ($215.97 million USD), Crédit Industriel et Commercial (CIC) ($36.54 million USD), Caixabank, S.A. ($73.08 million USD), Commonwealth Bank of Australia (CBA) ($325.73 million USD), CIT Finance LLC ($36.54 million USD), the Cayman Islands Branch of Credit Suisse AG ($392.67 million USD), Goldman Sachs Bank USA ($392.67 million USD), HSBC Bank USA, National Association ($392.67 million USD), ING Capital LLC ($392.67 million USD), the New York Branch of Intesa Sanpaolo, S.P.A. ($392.67 million USD), JPMorgan Chase Bank, N.A. ($392.67 million USD), The Korea Development Bank (KDB) ($36.54 million USD), the New York Branch of Landesbank Baden-Württemberg (LBBW) ($54.81 million USD), Lloyds Bank PLC ($392.67 million USD), Mizuho Bank, Ltd. ($392.67 million USD), Morgan Stanley Bank, N.A. and Morgan Stanley Senior Funding, Inc. (together $392.67 million USD), Royal Bank of Canada (RBC) ($392.67 million USD), Raymond James Bank, N.A. ($36.54 million USD), the Miami Branch of Banco de Sabadell, S.A. ($54.81 million USD), Standard Chartered Bank plc ($294.50 million USD), The Bank of Nova Scotia (Scotiabank) ($392.67 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($438.46 million USD), Société Générale S.A. (SocGen) ($392.67 million USD), and Wells Fargo Bank, National Association ($36.54 million USD). All 32 lenders, including BOC and ICBC, each contributed to the $3,096,055,631.43 USD portion for Train 3 of the Corpus Christi Liquefaction Project. However, Cheniere Energy did not sign the necessary off-taker agreements for Train 3 by December 31, 2015, and did not ask for a waiver, so the debt was terminated / cancelled. Record ID#107249 captures BOC's commitment. Record ID#107250 captures ICBC's commitment. SocGen served as facility agent. The New York Branch of BBVA and CACIB served as mandated lead arrangers (though not in their individual capacities). Bank of America, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, HSBC Bank USA, the New York Branch of ICBC, ING Capital LLC, the New York Branch of Intesa Sanpaolo, JPMorgan Chase Bank, Lloyds Bank, Mizuho Bank, Morgan Stanley Senior Funding, Inc., RBC, Scotiabank, SG Americas Securities, LLC, SMBC, CBA, Standard Chartered Bank, and BTMU served as joint lead arrangers (though not in their individual capacities). Bank of America, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, HSBC Bank USA, the New York Branch of ICBC, ING Capital LLC, the New York Branch of Intesa Sanpaolo, JPMorgan Chase Bank, Lloyds Bank, Mizuho Bank, Morgan Stanley Senior Funding, RBC, Scotiabank, SG Americas Securities, LLC, SMBC, CBA, Standard Chartered Bank, and BTMU served joint lead bookrunners (though not in their individual capacities). Credit Suisse Securities (USA) LLC, HSBC Bank USA, ING Capital LLC, JPMorgan Chase Bank, Mizuho Bank, Morgan Stanley Senior Funding, Scotiabank, and SMBC served as co-documentation agents (though not in their individual capacities). Bank of America, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, HSBC Bank USA, ING Capital LLC, the New York Branch of ICBC, the New York Branch of Intesa Sanpaolo, JPMorgan Chase Bank, Lloyds Bank, Mizuho Bank, Morgan Stanley Senior Funding, RBC, Scotiabank, SG Americas Securities, LLC, and SMBC served as co-structuring leads (though not in their individual capacities). Bank of America, BNP Paribas Securities Corp., Goldman Sachs Bank USA, the New York Branch of ICBC, the New York Branch of Intesa Sanpaolo, Lloyds Bank plc, RBC, SG Americas Securities, LLC, CBA, Standard Chartered Bank, and BTMU served as co-syndication agents (though not in their individual capacities). On December 12, 2014, the following banks signed a commitment letter with the borrower for the term loan: Bank of America, BNP Paribas Securities Corp., the Cayman Islands Branch of Credit Suisse, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, HSBC Bank USA, ING Capital LLC, the New York Branch of Intesa Sanpaolo, JPMorgan Chase Bank, Lloyds Bank, Mizuho Bank, Morgan Stanley Senior Funding, RBC, Scotiabank, SocGen, SG Americas Securities LLC, SMBC, CBA, Standard Chartered Bank, and BTMU. CACIB signed a joinder to the letter on December 18, 2014. The New York Branch of BBVA signed a joinder to the letter on December 24, 2014. The New York Branch of ICBC signed a joinder to the letter on January 8, 2015. In addition to the term loan facility, Cheniere Energy entered into an an Equity Contribution Agreement on May 13, 2015 with Cheniere Corpus Christi Holdings to provide approximately $2.64 billion USD in equity for Trains 1 and 2 (or, for all three trains, at least $1.621 billion USD in first tier equity funding and up to a maximum of $1.137 billion USD in second tier pro rata equity funding). The Trains 1 and 2 of the Corpus Christi Liquefaction Project had SPAs with a number of off-takers, including Enel (3 billion cubic meters of gas (bcm) per year from Train 1), Endesa Generación (2.25 mtps from Trains 1 and 2), Électricité de France, S.A. (0.77 mtpa from Trains 2 and 3), Iberdrola, S.A. (0.8 mtpa from Trains 1 and 2), Naturgy Energy Group S.A., PT Pertamina (Persero) (1.52 mtpa from Trains 1 and 2), Gas Natural Fenosa LNG (1.5 mtpa from Train 2), Woodside Energy Trading Singapore Pte Ltd (0.85 mtpa from Train 2), and Central El Campesino (0.6 mtpa from the project). Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline Company (TGP) agreed to provide 550,000 dekatherms a day (Dth/d) of firm natural gas transportation service, including 3 billion cubic feet of natural gas storage capacity, under a 15-year agreement for the project. Bechtel Oil, Gas and Chemicals, Inc. was the engineering, procurement and construction (EPC) contractor for Trains 1 and 2 under a $7.1 billion USD contract from December 2013. Baker Hughes won a contract from Bechtel to supply turbomachinery equipment for the trains. Bechtel used ConocoPhillips Optimized Cascade technology in the trains. The Federal Energy Regulatory Commission (FERC) issued the final environmental statement for the project in October 2014. FERC approved the entire project in December 2014. The U.S. Department of Energy Office of Fossil Energy and Carbon Management issued an approval for the export of LNG to Free Trade Agreement nations in August 2015, despite opposition from activists opposing fossil fuels. Work under the EPC contract was expected to commence in 2014 once a positive final investment decision (FID) was made, with the first LNG train to begin operations in 2018 and the second train to commence operations approximately six to nine months thereafter (likely in 2019). On May 13, 2015, Cheniere Energy made a positive FID for the Corpus Christi Liquefaction Project and issued a notice to proceed Bechtel Oil, Gas and Chemicals, Inc.. Construction began in May 2015. Train 1 first produced LNG in November 2018. The first cargo was shipped in early December 2018. Train 1 was commissioned in early March 2019. Production at Train 2 began in mid-June 2019 and produced its first cargo in July 2019. Train 2 was commissioned on August 28, 2019. Sunland Construction Inc. was contracted to build the pipeline. The Corpus Christi Pipeline was completed in 2018. The Corpus Christi Liquefaction Project has been the subject of local controversy. When lit, its flare releases hundreds of pounds of pollutants into the air such as volatile organic compounds, nitrogen oxides, carbon monoxide, and greenhouse gases like carbon dioxide and methane, according to Cheniere's incident reports with the Texas Commission on Environmental Quality (TCEQ), though TCEQ has never fined the project. Air quality concerns from the flare were the cause of concern, and planned expansion at the Corpus Christi Liquefaction, which would increase the permitted emission capacity, was seen as dangerous. In June 2021, Corpus Christi residents filed a contested case hearing with TCEQ to challenge the state permit, arguing that the flare caused respiratory illnesses to act up ad was harming local children. Moreover, residents alleged that emission events exceeding the permitted levels, and that Corpus Christi LNG did not use the most advanced available technologies to reduce air pollution.Corpus Christi had permits to release up to 5.8 million tons of greenhouse gases annually, the equivalent of nearly 1 ½ coal-fired power plants, and facilitated greenhouse gas emissions abroad via exports. The Sierra Club filed a petition to review FERC's approval of the project, arguing it did not adequately address the indirect effects of natural gas exports and the cumulative effect of greenhouse gas emissions, which was denied by the U.S. Court of Appeals for the District of Columbia Circuit in November 2016. For its part, Cheniere constructed over $8 million USD of breakwater projects to minimize shoreline erosion and to protect sensitive wetlands nearby, while Bechtel and Cheniere worked with the National Hispanic Entrepreneurs’ Organization (NHEO) Institute to ensure equity by identifying and eliminating barriers among non-native English speaking workforce and to reduce eliminate hazards. On May 22, 2018, a syndicate of 45 banks — including the New York Branch of BOC, the New York Branch of China Merchants Bank Co., Ltd., and the New York Branch of ICBC — entered into a $6,137,411,725.48 USD syndicated term loan facility agreement with Cheniere Corpus Christi Holdings, LLC for Train 3 of the Corpus Christi Liquefaction Project. This term loan was an amendment-and-restatement of the $8,403,714,178.62 USD existing term loan facility dated May 13, 2015; it refinanced $4.8 billion USD loan which was used to finance the construction of Trains 1 and 2 of the Corpus Christi Liquefaction Project (that were still under construction at the time of the term loan) and to provide for further commitments to fund a portion of the cost of the development, construction, and operation of the Corpus Christi Liquefaction Project, including Trains 1, 2, and 3 and associated pipeline and other infrastructure at or near the project and for related business purposes; however, the funding of Train 3 was the primary purpose of the financing. Record ID#107192 captures BOC's $151.5 million USD contribution. Record ID#107194 captures China Merchants Bank's contribution. Record ID#107195 captures ICBC's contribution.