ICBC contributes $405.54 million USD to the $5.47745 billion USD term loan tranche of a $5.77745 billion USD syndicated loan for the Calcasieu Pass LNG Project (Linked to Record ID#107586 and #107587)

Project narrative

On August 19, 2019, a syndicate of 13 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $5.77745 billion USD syndicated loan facility agreement with Venture Global Calcasieu Pass, LLC (VGCP) — a Delaware-incorporated special purpose vehicle (SPV) wholly-owned subsidiary of Delaware-incorporated SPV Calcasieu Pass Pledgor, LLC (CP Pledgor), a wholly-owned subsidiary of Delaware-incorporated SPV Calcasieu Pass Holdings, LLC, which was jointly owned by Delaware-incorporated Calcasieu Pass Funding, LLC, a direct-wholly owned subsidiary of Venture Global LNG, LLC, a Delaware-incorporated privately-held American LNG provider based in Arlington, Virginia (71% equity stake, all the common units) and Stonepeak Bayou Holdings LP, a Delaware-incorporated limited partnership controlled by Stonepeak Partners LP, a Delaware-incorporated American independent infrastructure investment manager headquartered in New York City, New York (29% equity stake, all the preferred units, to convert into common units upon commercial operation date of the project) — for the Calcasieu Pass Liquefied Natural Gas (LNG) Project. This facility was divided into two tranches: a $5.47745 billion USD senior secured first lien construction term loan tranche and a $300 million USD senior secured working capital revolving credit facility (RCF) tranche. This facility carried a maturity period of seven years and a final maturity date of August 19, 2026. The principal of the term loan tranche had a repayment schedule of quarterly installments beginning on March 31, 2023 (a grace period of approximately 3.616 years). This facility carried a variable interest rate based on LIBOR or a base rate plus a margin that varies from 2.38% to 2.88% for LIBOR loans and 1.38% to 1.88% for base rate loans. This facility also incurred quarterly commitment fees based on the undrawn commitment of the facility and certain letter of credit fees. TransCameron Pipeline, LLC (TCP) — a Delaware-incorporated wholly-owned subsidiary of Calcasieu Pass Pledgor, LLC — issued a guarantee for obligations of the borrower under the term loan tranche. The term loan tranche was secured by (i.e. collateralized against) a first priority lien on substantially all of the assets of VGCP and TCP and by a pledge by Calcasieu Pass Pledgor, LLC (CP Pledgor), of its limited liability company interests in VGCP and TCP, excepting the real property rights held by TCP, including the rights of way related to the TransCameron Pipeline. The New York Branch of Natixis served as credit facility agent. Mizuho Bank (USA) served as collateral agent. The facility contained customary affirmative and negative covenants that limited the borrower’s ability to incur additional indebtedness, undertake fundamental changes, create liens, make investments, dispose of assets, pay distributions or other restricted payments, or enter into new material project documents, or undertake certain actions under such material project documents. The facility also included a financial covenant requiring the borrower to maintain a minimum historical debt service coverage ratio of 1.15:1 for the applicable period ending as of the end of any fiscal quarter. On August 19, 2019, VGCP and TCP entered into the Common Terms Agreement with the New York Branch of Natixis as the facility agent for the lenders and Mizuho Bank, Ltd. as the intercreditor agent to define a common representations and warranties, common covenants, and common events of default under the documents including the agreement governing the facility agreement. VGCP was required to hedge not less than 75%, but no more than 105%, of the variable interest rate exposure of its senior secured debt. VGCP was restricted from making distributions under agreements governing its indebtedness generally until, among other requirements, the completion of the construction of the Calcasieu Pass LNG Project, funding of a debt service reserve account equal to six months of debt service, and achieving certain minimum historical and projected debt service coverage ratios of at least 1.25:1.00, provided that VGCP may make pre-completion distributions if it satisfies a number of conditions. Another condition was that upon VGCP’s incurrence of any replacement debt, a portion of the term loan tranche amounts outstanding and/or commitments in an amount equal to the amount of such replacement debt less certain provisions, costs, prepayment premiums, fees and expenses were required to prepaid. Failure to achieve commercial operations by a certain date (at one point, December 31, 2024) would constitute an event of default under the credit facility. ICBC contributed $405.54 million USD to the $5.47745 billion USD term loan tranche, as captured by Record ID#107585. In addition to ICBC, the following lenders contributed the respective amounts to the tranche: Bank of America, N.A. ($422.66 million USD), Goldman Sachs Bank USA ($422.66 million USD), ING Capital LLC ($422.66 million USD), JPMorgan Chase Bank, N.A. ($422.66 million USD), Mizuho Bank Ltd. ($422.66 million USD), Morgan Stanley Senior Funding Inc. ($422.66 million USD), Natixis ($422.66 million USD), Nomura Securities International Inc. ($422.66 million USD), Royal Bank of Canada (RBC) ($422.66 million USD), Banco Santander S.A. ($422.66 million USD), The Bank of Nova Scotia (Scotiabank) ($422.66 million USD), and Sumitomo Mitsui Banking Corporation (SMBC) ($422.66 million USD). ICBC contributed $22.21 million USD to the $300 million USD RCF tranche, as captured by Record ID#107586. In addition to ICBC, the following lenders contributed the respective amounts to the tranche: Bank of America ($23.15 million USD), Goldman Sachs Bank USA ($23.15 million USD), ING Capital ($23.15 million USD), JPMorgan ($23.15 million USD), Mizuho Bank ($23.15 million USD), Morgan Stanley Senior Funding ($23.15 million USD), Natixis ($23.15 million USD), Nomura Securities International ($23.15 million USD), RBC ($23.15 million USD), Banco Santander ($23.15 million USD), Scotiabank ($23.15 million USD), and SMBC ($23.15 million USD). All the lenders were lead arrangers, and the loan generated $10 billion USD in binding commitments from the initial coordinating lead arrangers prior to syndication. This was the largest project financing to close in 2019 in North America. On September 30, 2021, financial close was reached in the 13-bank lending syndicate — still including all the original lenders, including ICBC — entered into a $225.00 million USD up-sizing of the $300 million USD secured working capital RCF tranche, raising the face value to $555 million USD. The maturity of the up-sized commitment was 4.888 years (still to August 19, 2026). Each lender, including ICBC, contributed $19.62 million USD to the up-sizing. Record ID#107587 captures ICBC's contribution. On August 5, 2021, the borrower prepaid approximately $2.1 billion USD of indebtedness outstanding under the term loan tranche via proceeds from the offering of $1.25 billion USD VGCP 2029 Notes and the $1.25 billion USD VGCP 2031 Notes. On November 22, 2021, the borrower prepaid approximately $1.0 billion USD of indebtedness outstanding under the term loan tranche via proceeds from the offering of the $1.250 billion USD VGCP 2033 Notes. As of December 31, 2022, the term loan tranche was fully drawn and there was $2.3 billion USD outstanding under it. As of December 31, 2022, the borrower had $553 million USD of outstanding letters of credit under the RCF tranche. On January 13, 2023, the borrower prepaid approximately $1.0 billion USD of indebtedness outstanding under the term loan tranche via proceeds from the offering of the $1 billion USD VGCP 2030 Notes. On March 31, 2023, the borrower made the first scheduled amortization payment of the principal of the term loan tranche. In June 2023, the lending syndicate entered into an amendment agreement for the syndicated loan facility, in which the variable interest rate was transitioned from LIBOR to Term SOFR; Term SOFR depended on the interest period, being either 0.10% for a one-month term, 0.15% for a three-month term, or 0.25% for a six-month term. Interest was due and payable at the end of each interest period (at least every three months) while interest on base loans would be due and payable at the end of each calendar quarter. As of December 31, 2023, there was $1.2 billion USD outstanding under the term loan tranche. As of December 31, 2023, the borrower had $339 million USD of outstanding letters of credit under the RCF tranche. The proceeds were used by the borrower to finance the $7.296 billion USD development, construction, and commissioning of the Calcasieu Pass LNG Project, a baseload 10.7 million tons per year (mtpa) (12 mtpa peak) natural gas liquefaction facility and export terminal with a pretreatment unit, 18-train liquefaction system, two 200,000-cubic-meter LNG storage tanks, two vessel loading berths, and a 700 MW 5×2 combined cycle power island that was supplemented with an additional 25 MW turbine located in Cameron Parish, Louisiana, and the associated 24-mile long 42-inch diameter TransCameron Pipeline pipeline with a capacity of 1.9 billion cubic feet per day from Grand Chenier Station and to the Calcasieu Pass LNG Project. In addition to the debt, Venture Global raised $885 million USD in corporate equity ($1.25 billion USD in equity in total) and Stonepeak Infrastructure Partners provided a $1.3 billion USD project-level equity commitment from. The project had 20-year sale and purchase agreements with Shell, BP, Edison S.p.A., Galp, Repsol and PGNiG for 8 mtpa of its output. In February 2019, the U.S. Federal Energy Regulatory Commission (FERC) issued authorization for the project. The U.S. Department of Energy also issued its non-Free Trade Agreement export authorization for LNG from the plant. In May 2021, Venture Global LNG announced that it planned to capture and sequester carbon at both its Calcasieu Pass Terminal to reduce greenhouse gas emissions via capturing and compressing carbon dioxide at the site and transporting the gas to be permanently stored in subsurface saline aquifers. In November 2021, FERC approved Venture Global commissioning liquefaction systems at the first block. In December 2021, FERC approved Venture Global commissioning liquefaction systems at the second block and issued a notice that Venture Global had requested to increase the total peak achievable liquefaction capacity from 12 mtpa to 12.4 mtpa. Baker Hughes GE served as engineering, procurement, and construction (EPC) contractor the LNG liquefaction train system (LTS) with 18 modularized compression trains. Kiewit also served as EPC contractor. Site construction began in February 2019 with the expected commercial operations date (COD) falling in 2022. The TransCameron Pipeline was completed in April 2021. LNG production at the Calcasieu Pass Project started on January 19, 2022, and as of February 2022, four blocks (each with two trains) were cleared for commissioning. Trains 1 through 12, representing 7.5 mtpa of capacity, came online in March 2022. The project was fully online as of May 2022, but did not enter full commercial operations. As of April 2023, Venture Global was still preparing the facility for full commercial operation, with delays due to repairs at a power generation at the facility. As of October 2023, the facility's commissioning period was reportedly the longest ever of its kind, being 19 months and allowing Venture Global to sell LNG on the spot market at higher prices than if it had been selling LNG under its long term contracts, which would to begin once the facility finishes commissioning, leading to accusations Venture Global was purposefully slow walking the commissioning process and keeping the plant unfit and unclean to generate more revenue, with four companies that signed contracts with Venture Global filing for arbitration. In February 2024, Venture Global requested from FERC a one-year extension to commission the facility by February 2025 citing ongoing work on the facility's power generation. Venture Global claimed that the facility was experiencing equipment failures and other wearing-in issues that must be resolved before starting commercial operations. Calcasieu Pass LNG reported over 138 incidents in which the facility polluted more than it was permitted. A 2023 report from the Louisiana Bucket Brigade found that the project violated its permit on 83% of the days of its first year of operation (286 of 343 days total), with each day of violating state regulations in theory making it liable for $32,500 USD in fines. Calcasieu Pass had also violated its sulfur dioxide emissions cap over three months of 2022, which the company failed to disclose as quickly as required by state regulations. An October 2023 report from the Institute for Energy Economics and Financial Analysis (IEEFA) found that the facility's speedy construction was responsible for its ongoing issues with commissioning and air pollution, with leaks and excessive flaring from design flaws leading to frequent air pollution permit violations, endangering local communities Cameron Parish.