ICBC contributes $114 million USD to $2.85 billion USD term loan A of a $4.6 billion USD syndicated loan package for the Sabine Pass LNG Train 5 and Trains 1-4 Refinancing Project

Project narrative

On June 30, 2015, financial close was reached on a deal in which a syndicate of 32 banks — including the New York Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a $4.6 billion USD syndicated loan package agreement with Sabine Pass Liquefaction, LLC (SPL) — a Delaware-incorporated special purpose vehicle (SPV) and wholly owned subsidiary of Delaware-incorporated SPV Sabine Pass LNG-LP, LLC, a wholly-owned subsidiary of Cheniere Energy Investments, LLC, a Delaware-incorporated wholly-owned subsidiary of Cheniere Energy Partners, L.P., a Delaware-incorporated company jointly owned by Cheniere Energy Partners LP Holdings, LLC, a Delaware-incorporated company that, while publicly-traded, was 80% owned by Delaware-incorporated American gas company Cheniere Energy, Inc. (56% stake); by Cheniere Energy directly (2% stake); and by Blackstone CQP Holdco L.P. (BXCQP), a Delaware-incorporated limited partnership wholly owned by the private equity arm of American alternative investment management company The Blackstone Group (29% stake) — for the Sabine Pass Liquefied Natural Gas (LNG) Train 5 and Trains 1-4 Refinancing Project. This loan was divided into four credit facilities: a $2,850,000,000.00 USD senior secured credit facility under a Second Amended and Restated Credit Agreement (Term Loan A) with Société Générale S.A. (SocGen), as the commercial banks facility agent and common security trustee; a $600 million USD senior secured credit facility under the Export-Import Bank of Korea (KEXIM) Direct Facility Agreement with the New York Branch of Shinhan Bank, as the agent and SocGen as the common security trustee; a $400,000,000.00 USD senior secured credit facility agreement under KEXIM coverage with the New York Branch of Shinhan Bank as agent and SocGen as common security trustee; and a $750,000,000.00 USD senior secured credit facility under an Amended and Restated KSURE Covered Facility Agreement with the New York Branch of Korea Development Bank (KDB) as agent and SocGen as common security trustee. The term loan A included four tranches: $200,000,000.00 USD Tranche 1, $150,000,000.00 USD Tranche 2, $150,000,000.00 USD Tranche 3, and $2,350,000,000.00 USD Tranche $. Tranche 1 would have to be fully drawn before Tranche 2 could be used, and then Tranche 2 fully drawn before Tranche 3, and then Tranche 3 before Tranche 4. The credit facilities carried a maturity period of approximately 5.510 years and a final maturity date of December 31, 2020, though if the second anniversary of project completion was before that date the loan would be due then. Principal repayment was due in quarterly installments, commencing upon the earlier of June 30, 2020 (a grace period of five years) or the last day of the first full calendar quarter following the project completion date, with an 18-year amortization profile and balloon payment due on final maturity. The facilities carried an interest rate based on a variable rate per annum equal to LIBOR or the base rate (determined by reference to the applicable agent’s prime rate) plus an applicable margin. For the $2.85 billion USD term loan, the margin was 1.75%. LIBOR borrowings were due and payable at the end of each LIBOR period, and interest on base rate borrowings was due and payable at the end of each calendar quarter. The credit facilities included a commitment fee calculated at a rate per annum equal to 40% of the applicable margin multiplied by the average daily amount of the undrawn commitment for the term loan A, the KEXIM covered agreement, and the KSURE Covered Agreement, and at a rate per annum equal to 0.70% of the committed but undisbursed amounts of the KEXIM direct agreement, payable quarterly in arrears. Annual administrative fees were also due to the agents and the common security trustee. The credit facilities were secured by (i.e. collateralized against) a first priority lien in substantially all of the assets of Sabine Pass Liquefaction, LLC and by by a pledge of all of the membership interests in Sabine Pass Liquefaction, LLC. Furthermore, SPL was required to establish and maintain certain deposit accounts subject to the control of the common security trustee where the proceeds of the credit facilities and other receipts would be deposited into and would hold the various reserve accounts required by the facilities. On June 30, 2015, the borrower entered into a Second Amended and Restated Common Terms Agreement with SocGen as the common security trustee and intercreditor agent and the facility agents under each of the facilities providing for common representations and warranties, covenants and events of default in relation to the facilities. The credit facilities contained customary affirmative and negative covenants, including customary covenants restricting the borrower's ability to incur additional indebtedness or liens, engage in asset sales, enter into hedging arrangements (other than permitted hedging agreements), modify or enter into certain material agreements related to the project, and engage in transactions with affiliates. The credit facilities included covenants that required the borrower to maintain interest rate protection agreements with respect to at least 65% of its senior secured debt (with any fixed rate senior secured debt being deemed subject to such interest rate protection agreements); to restrict the borrower's ability to enter into certain change orders under the engineering, procurement, and construction (EPC) contracts entered into with Bechtel Oil, Gas and Chemicals, Inc.; to restrict the borrower's ability to enter into gas purchase contracts with firm receipt obligations for gas volumes in excess of the amount required to meet its obligations under its LNG sales contracts; to restrict the borrower's ability to make equity distributions prior to completion of the second train at the SPL Project, and require that certain criteria be satisfied in order to make such equity distributions; and require that commencing with the first calendar quarter ending at least three months after the project completion date, the borrower must maintain a minimum debt service coverage ratio of at least 1.15x, provided that if the borrower's debt service coverage ratio as of the end of any such quarter is less than 1.15x but greater than 1.00x, the borrower could cure the deficiency by obtaining additional cash in the form of equity or subordinated indebtedness although such right may not be exercised for more than two consecutive quarters or more than four times over the term of the credit facilities. The borrower was permitted, however, to incur additional indebtedness to fund the sixth planned natural gas liquefaction train of the project so long as the debt to equity ratio did not exceed 75:25 and the borrower met specified 12 month projected debt service coverage ratios. Each of the 25 lenders, including ICBC, to the $2.85 billion USD term loan A contributed $114.00 million USD. Record ID#108268 captures ICBC's contribution. In addition to ICBC, the following lenders contributed to the facility: ABN Amro Capital USA LLC, the New York Branch of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), Bank of America, N.A., CaixaBank, S.A., Crédit Industriel et Commercial (CIC), Commonwealth Bank of Australia (CBA), Crédit Agricole Corporate and Investment Bank (CACIB), the Cayman Islands Branch of Credit Suisse AG, Goldman Sachs Bank USA, HSBC Bank USA, National Association, ING Capital LLC, the New York Branch of Intesa Sanpaolo S.P.A., JPMorgan Chase Bank, N.A., the New York Branch of Landesbank Baden-Württemberg (LBBW), Lloyds Bank plc, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mizuho Bank, Ltd., Morgan Stanley Senior Funding, Inc., The Bank of Nova Scotia (Scotiabank), Royal Bank of Canada (RBC), Santander Bank, N.A., Société Générale S.A. (SocGen), Sumitomo Mitsui Banking Corporation (SMBC), and Wells Fargo Bank, N.A.. SocGen served as the commercial banks facility agent, the common security trustee, and co-syndication agent. SG Americas Securities, LLC served as the joint lead arranger and joint lead bookrunner. Scotiabank, HSBC Bank USA, ING Capital, JPMorgan Chase Bank, Morgan Stanley Senior Funding, and SMBC served as joint lead arrangers, joint lead bookrunners, and co-documentation agents. ABN Amro Capital USA LLC, the New York Branch of BBVA, Banco Santander, S.A., Bank of America, BTMU, CACIB, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, the New York Branch of Intesa Sanpaolo, Mizuho Bank, RBC, and Santander Bank served as joint lead arrangers, joint lead bookrunners, and co-syndication agents. The New York Branch of ICBC and Lloyds Securities Inc. served as mandated lead arrangers. Caixabank and the New York Branch of LBBW served as managers. The Export Import Bank of Korea was the sole provider of the $600 million USD direct facility. The $400 million USD term loan covered by the Export-Import Bank of Korea had each of its five lenders provide $80.00 million USD: KEB Hana Bank, KB Kookmin Bank, Nonghyup Bank, the New York Branch of Shinhan Bank, and Woori Bank. The $750 million USD KSURE covered facility had each of its three lenders provide $250.0 million USD: Korea Development Bank (KDB) and its the New York Branch, NH Investment & Securities Co. Ltd., and SocGen. The proceeds were to be used by the borrower to refinance a portion of the costs of developing, constructing and placing into service Trains 1-4 of the Sabine Pass Liquefaction Project and to finance the construction of Train 5. The credit facilities replaced (refinanced) existing debt; term loan A specifically refinanced debt via an amendment-and-restatement of debt originally incurred by the borrower in a $3.6 billion USD credit agreement dated July 31, 2012 that was amended on January 9, 2013 and then amended-and-restated for $4.4 billion USD on May 28, 2013 and then amended on March 21, 2014, that were used by the borrower to finance the construction of Trains 1-4 (Trains 3 and 4 were financed in the amendment-and-restatement in May 2013). The overall Sabine Pass Liquefaction Project sought to construct and operate six liquefaction trains, each with a nominal production capacity of at least 182,500,000 million British Thermal Units per annum (4.5 million tons per annum (mtpa)), adding liquefaction services at the existing Sabine Pass Terminal, which had five LNG storage tanks with capacity of approximately 16.9 billion cubic feet equivalent (Bcfe), two docks that could accommodate vessels with nominal capacity of up to 266,000 cubic meters, and vaporizers with regasification capacity of approximately 4.0 Bcf/d, in Cameron Parish, Louisiana on the Sabine-Neches Waterway less than four miles from the Gulf Coast, designed to import foreign LNG, allowing it to liquefy and export domestic U.S. natural gas. As of May 31, 2015, Train 1 and 2 were 90.8% complete and Train 3 and 4 were 67.7% complete; difficulties in finding skilled labor and adverse weather had delayed progress slightly behind target dates. Term loan A specifically financed the construction of 4.5 mtpa Train 5. Bechtel Oil, Gas and Chemicals, Inc. was the engineering, procurement, and construction (EPC) contractor for Train 5. SPL had sale and purchase agreements (SPAs) with Centrica plc and Total Gas & Power North America, Inc. for the output of Train 5. SPL issued a notice to proceed to Bechtel under the EPC contract for Train 5 on June 30, 2015. Train 5 reached substantial completion on March 7, 2019. The entire project, including Train 5, received criticism for emissions of air pollutants and greenhouse gases.