ICBC contributes $137.5 million USD to a $3 billion USD syndicated loan for the Cove Point Liquefied Natural Gas (LNG) 2018 Refinancing Project (Linked to Record ID#107301)

Project narrative

On September 25, 2018, financial close was reached on a deal in which a syndicate of 21 banks — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a $3.000 billion USD syndicated term loan agreement with Dominion Energy Cove Point LNG, LP — a Delaware-incorporated special purpose vehicle (SPV) owned by Delaware-incorporated SPV Cove Point GP Holding Company, LLC, a wholly-owned subsidiary of Dominion Energy Midstream Partners, LP, of which 60.9% of the common and subordinated units and 37.5% of the convertible preferred interest was held by Dominion Energy Midstream GP, LLC, a wholly-owned subsidiary of Virginia-incorporated Dominion Cove Point, Inc., a wholly-owned subsidiary of Dominion Energy, Inc., an American energy and electric utility company headquartered in Richmond, Virginia and listed on the New York Stock Exchange — for the Cove Point Liquefied Natural Gas (LNG) 2018 Refinancing Project. This loan carried a maturity period of three years, a final maturity date of September 25, 2021, and a variable interest rate of LIBOR plus 1.375%. This loan was secured by (i.e. collateralized against) Dominion Energy's common equity interest in Dominion Energy Cove Point LNG, LP. This loan featured covenants limiting the borrower's ability to issue additional debt, divest from the Cove Point LNG facility, or pay distributions to Dominion Energy. Bank of China contributed $45.00 million USD to the loan syndicate, as captured by Record ID#107301. ICBC contributed $137.50 million USD to the loan syndicate, as captured by Record ID#107302. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: Branch Banking and Trust Company (BB&T) ($137.50 million USD), Canadian Imperial Bank of Commerce (CIBC) ($137.50 million USD), Citigroup ($137.50 million USD), Crédit Agricole ($137.50 million USD), DNB ASA ($137.50 million USD), First Horizon Bank ($45.00 million USD), ING Group N.V. ($137.50 million USD), JPMorgan Chase Bank, N.A. ($250.00 million USD), KeyBanc Capital Market Inc. (KBCM) ($45.00 million USD), Mitsubishi UFJ Financial Group ($250.00 million USD), Mizuho Financial Group ($250.00 million USD), Natixis ($45.00 million USD), Royal Bank of Canada (RBC) ($137.50 million USD), the Bank of Nova Scotia (Scotiabank) ($250.00 million USD), Société Générale S.A. (SocGen) ($137.50 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($250.00 million USD), SunTrust Bank $137.50 million USD), Union Bank ($57.50 million USD), and Wells Fargo Bank ($137.50 million USD). The loan commitments were received September 2018. The proceeds were to be used by the borrower for refinancing purposes, namely reducing parent-level debt of Dominion Energy by shifting it to the borrower; the debt had used to construct the Cove Point LNG, an import, export, and liquefaction facility and terminal located on 131 acres of a 1,000-acre site near Lusby, Calvert County, on the western shore of the Chesapeake Bay in southern Maryland. Cove Point LNG was originally an LNG import and storage facility that began operations in the 1970s and had some expansions in the 2000s to add more storage tanks; it briefly exported gas in the 1970s. Then, beginning in October 2014 and completing in March 2018, the facility was expanded for LNG export. Facilities after the $3.4 billion USD to $3.8 billion USD expansion included one LNG liquefaction train consisting of gas treatment equipment, natural gas-fired turbine-driven refrigerant compressors, waste heat recovery systems, fire and gas detection and safety systems, control systems, seven storage tanks, a 130 MW combined cycle generating station, and a shipping dock located about 1.4 miles from the plant’s storage tanks and connected by pipes in an underwater tunnel to Cove Point’s offshore dock for pumping into ship. With the expansion, Cove Point's send-out capacity increased from 1 billion standard cubic foot per day (SCFD) to 1.8 billion SCFD and nearly doubled storage capacity from 7.8 billion cubic feet to 14.6 billion cubic feet of natural gas and the liquefaction facilities have an LNG production and export capacity of up to 5.75 million metric tones per year of gas. The terminal was connected via its own 136-mile Cove Point pipeline out to Loudoun County, Virginia, to the major Mid-Atlantic gas transmission systems of the Transcontinental Gas Pipeline, Columbia Gas Transmission, and Dominion Energy Transmission. The borrower drew down $2.0 billion USD in September 2018 and $1.0 billion USD in December 2018. In September 2019, Dominion Energy Questar Corporation entered into a $3.0 billion USD 364-Day Term Loan Agreement with lenders, the proceeds of which were used to repay the principal of the $3.0 billion USD term loan borrowed by Dominion Energy Cove Point LNG.