Bank of China contributes $152.76 million USD to a $4.038 billion USD syndicated loan for the Corpus Christi Stage 3 Liquefaction Project (Linked to Record ID#107275)

Project narrative

On June 15, 2022, a syndicate of 36 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 an approximately $4,038,570,000 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 the Corpus Christi Stage 3 Liquefaction Project. 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 and done in quarterly installments, commencing the first full quarter after the project completion (or, if earlier, January 31, 2028) 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 Term SOFR (SOFR plus 0.10%) or an alternate base rate (the greater of the agent's prime rate, the Federal Funds Rate plus 0.50%, or one-month adjusted Term SOFR plus 1.00%) plus an applicable margin of 1.5% for Term SOFR loans (1.6% plus SOFR) and 0.5% for base rate loans. Interest on Term SOFR 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, administrative fees to the agents, and a commitment fee calculated at a rate per annum equal to 35% of the margin for Term SOFR loans (0.525%), multiplied by the outstanding debt commitments. 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 Second Amended and Restated Common Security and Account Agreement dated as of June 15, 2022 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 Amended and Restated Holdco Pledge Agreement, dated May 22, 2018 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 June 15, 2022, Cheniere Corpus Christi Holdings, and CCL, CCP, CCP GP (as guarantors) also entered into the Common Terms Agreement with Société Générale as facility agent and intercreditor agent. 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 distributions (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; 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 expansion 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 1.40x. 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. BOC contributed $152.76 million USD, as captured by Record ID#107254. ICBC contributed $92.30 million USD, as captured by Record ID#107275. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: Apple Bank for Savings Inc. ($44.30 million USD), the New York Branch of Banco Santander S.A. ($113.18 million USD), the New York Branch of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) ($143.16 million USD), the Houston Branch of The Bank of Nova Scotia (Scotiabank) ($148.66 million USD), Bank of America, N.A. ($148.57 million USD), CaixaBank, S.A. ($145.52 million USD), the New York Branch of Canadian Imperial Bank of Commerce (CIBC) ($135.48 million USD), Citibank, N.A. ($110.00 million USD), Crédit Agricole Corporate and Investment Bank (CACIB) ($119.66 million USD), the New York Branch of Credit Suisse AG ($110.00 million USD), DBS Bank Ltd. ($138.87 million USD), First-Citizens Bank & Trust Company ($50.00 million USD), FirstBank Puerto Rico d/b/a FirstBank Florida ($40.00 million USD), Goldman Sachs Bank USA ($110.00 million USD), HSBC Bank USA, National Association ($117.92 million USD), ING Capital LLC ($148.57 million USD), JPMorgan Chase Bank, N.A. ($125.08 million USD), The Korea Development Bank (KDB) ($100.81 million USD), the New York Agency of KEB Hana Bank ($50.00 million USD), KfW IPEX-Bank GmbH ($100.00 million USD), the New York Branch of Landesbank Hessen-Thüringen Girozentrale (Helaba) ($100.00 million USD), Mizuho Bank, Ltd. ($148.57 million USD), Morgan Stanley Bank, N.A. ($114.66 million USD), MUFG Bank, Ltd. ($147.64 million USD), the New York Branch of Natixis ($161.63 million USD), Raymond James Bank, N.A. ($105.04 million USD), Royal Bank of Canada (RBC) ($125.08 million USD), the Miami Branch of Banco de Sabadell, S.A. ($40.00 million USD), Siemens Financial Services, Inc. ($50.00 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($150.15 million USD), Société Générale S.A. (SocGen) ($146.34 million USD), Standard Chartered Bank plc ($110.00 million USD), Truist Bank ($110.00 million USD), and Wells Fargo Bank, N.A. ($136.18 million USD). SocGen served as facility agent. SocGen and MUFG Bank served as joint bookrunners. The Houston Branch of Scotiabank, BBVA, the New York Branch of Banco Santander, Bank of America, the New York Branch of BOC, CaixaBank, the New York Branch of CIBC, Citibank, CACIB, Credit Suisse Loan Funding LLC, DBS Bank, Goldman Sachs Bank USA, HSBC Bank USA, ING Capital, JPMorgan Chase Bank, the New York Branch of Mizuho Bank, Morgan Stanley Bank, MUFG Bank, the New York Branch of Natixis, RBC Capital Markets, SocGen, SMBC, Standard Chartered Bank, Truist Securities, and Wells Fargo Bank served as joint lead arrangers. Additionally, on June 7, 2022, the following lenders joined a commitment letter for the syndicated loan to the borrower: Apple Bank for Savings, the New York Branch of BBVA, the Miami Branch of Banco de Sabadell, the New York Branch of Banco Santander, Bank of America, the New York Branch of BOC, CaixaBank, the New York Branch of CIBC, Citibank, CACIB, the New York Branch of Credit Suisse AG, DBS Bank, FirstBank Puerto Rico, First-Citizens Bank & Trust Company, Goldman Sachs Bank USA, HSBC Bank USA, the New York Branch of ICBC, ING Capital, JPMorgan Chase Bank, the New York Agency of KEB Hana Bank, KfW IPEX-Bank GmbH, the New York Branch of Helaba, Mizuho Bank, Morgan Stanley Bank, MUFG Bank, the New York Branch of Natixis, Raymond James Bank, RBC, Siemens Financial Services, Inc., SocGen, Standard Chartered Bank, SMBC, the Houston Branch of Scotiabank, KDB, Truist Bank, and Wells Fargo Bank. This term loan was an amendment-and-restatement of the $6,137,411,725.48 USD existing term loan facility dated May 22, 2018 (BOC contributed $151.5 million USD, as captured by Record ID#107192; China Merchants Bank contributed $57.60 million USD; as captured by Record ID#107194. ICBC contributed $278.40 million USD, as captured by Record ID#107195); it provided $3.8 billion USD in commitments incremental to the outstanding debt to fund approximately half of the total cost (approximately $8 billion USD) of the development, construction, and operation of an expansion of the Corpus Christi Liquefaction Project. Stage 3 was part of the Corpus Christi Liquefaction Project, which was a greenfield liquefied natural gas (LNG) project that was initially 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. Corpus Christi Stage 3 sought to construct up seven mid-scale liquefaction trains each with a nominal LNG production capacity of 1.5 million mtpa (an aggregate capacity of 10.5 mtpa for Stage 3) and certain onsite and offsite utilities and supporting infrastructure such as one new 160,000-cubic meter LNG storage tank at the Corpus Christi LNG terminal and certain other associated infrastructure, including 21 miles of new 42-inch-diameter natural gas pipeline that would generally parallel the existing Corpus Christi Pipeline, and two electric motor driven natural gas compressor units capable of producing a total of approximately 32 MW of additional compression at the existing Sinton Compressor Station, appurtenant facilities including, meter and regulator stations, launcher and receiver facilities, and mainline valves. In addition to the loan, Cheniere Energy provided equity for the remaining $8 billion USD of the loan via Corpus Christi Liquefaction, LLC (which had Corpus Christi Liquefaction Stage III, LLC merged into it). Bechtel Energy Inc. was the engineering, procurement and construction (EPC) contractor under a contract with Corpus Christi Liquefaction Stage III, LLC (CCL3). As of July 2021, Cheniere had made three 15-year gas supply deals tied Stage 3 with Apache, EOG Resources, and Tourmaline, representing a total of 2.55 mtpa of the facility's expected capacity of 10 mtpa. In February 2022 Cheniere reached an agreement with EOG to triple the amount of gas supplied, allowing Stage 3 to advance. In May 2022, Cheniere announced a gas supply deal with ARC Resources U.S. for the supply of 140,000 million British thermal units (MMBtu) per day (1.5 billion cubic meters per year) of gas. In July 2022, Cheniere signed a new sales and purchase agreement (SPA) with PetroChina to purchase 1.8 mtpa from the facility between 2026 and 2050, half of which was dependent on post-Stage 3 expansion. In September 2022, Cheniere Energy signed a pipeline deal with Whistler Pipeline for the delivery of gas to Corpus Christi LNG Terminal via the ADDC pipeline, to deliver between 1.7 and 2.5 billion cubic feet per day of gas. In June 2018, Cheniere Energy filed an application with Federal Energy Regulatory Commission (FERC) to site, construct, and operate Stage 3.. On March 29, 2019, FERC published its environmental assessment, concluding that project approval was appropriate as long as appropriate mitigating measures were taken. In February 2020, the U.S. Department of Energy issued an approval for Stage 3 to ship LNG to countries not party to free trade agreements, such as Japan, South Korea, and India. In November 2019, FERC issued its order for the project to construct it through 2024. In December 2021, Cheniere requested an extension of FERC to extend the amount of time it had to build Stage 3 to 2027. In May 2022, FERC approved the extension to June 2027. Early works by Bechtel Energy began in early 2022 under a limited notice to proceed. On June 22, 2022, Cheniere Energy made a positive FID for the Corpus Christi Stage 3 Liquefaction Project and issued a full notice to proceed to Bechtel Energy. Formal groundbreaking commenced on October 4, 2022, with work expected to be complete in 2025. In May 2024, it was reported that Stage 3 was nearly a year ahead of schedule, with first LNG production expected by the end of 2024 and deliveries beginning in 2025, and full operations by 2027. First LNG was produced from stage on December 30, 2024. Train was expected to be completed in the first quarter of 2025. Overall project completion was 75.9% as of the end of 2024.