Bank of China contributes $25.86 million USD to the $750 million USD term loan tranche of a $1.5 billion USD syndicated loan for Train 6 of the Sabine Pass Liquefaction Project (Linked to Record ID#108301 and #108302)

Project narrative

On May 29, 2019, a syndicate of 30 lenders — including the New York Branch of the Bank of China (BOC), the New York Branch of Industrial and Commercial Bank of China (ICBC), and the New York Branch of China Merchants Bank Co., Ltd. — entered into a $1,500,000,000 USD syndicated senior secured credit and guaranty agreement with 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 Train 6 of the Sabine Pass Liquefaction Project. This facility was divided into two tranches: a $750,000,000 USD delayed draw term loan tranche and a $750,000,000 USD revolving credit facility (RCF) tranche. The facility carried a maturity period of five years and a final maturity date of May 29, 2024. Principal would be repaid in quarterly installments commencing four years from the loan signing, (a grace period of four years, first repayment of May 29, 2023). Borrowings under the term loan tranche carried an interest rate at a variable rate per annum equal to LIBOR plus 1.50% or the base rate plus 0.50%, in each case with a 0.25% step up beginning three years from signing. Borrowings under the RCF tranche carried an interest rate at a variable rate per annum equal to LIBOR plus a range of 1.25% through 2.125% (depending on the then-current debt rating of the borrower) or at the base rate plus a range of 0.25% through 1.125% (depending on the then-current rating of the borrower). As the ratings were BB / Ba2 / BB at around the time of signing, the LIBOR margin for the RCF was 2.125% and for the base rate it was 1.125%. Interest on LIBOR loans was due and payable at the end of each LIBOR period (and at the end of every three month period within the LIBOR period, if any), and interest on base rate loans was due and payable at the end of each calendar quarter. The facility required the borrower to pay certain upfront fees to the lenders on the date of the initial advance for a commitment fee calculated at a rate per annum equal to 30% of the margin for LIBOR loans multiplied by the average daily amount of the undrawn commitment, payable quarterly in arrears (0.45% for the term loan, 0.6375% for the RCF at signing). Annual administrative and agency fees and customary fronting fees were also required under the facility. The facility contained customary affirmative and negative covenants, including customary covenants that restrict the borrower's ability to incur additional indebtedness or liens, engage in asset sales, enter into hedging arrangements, or engage in transactions with affiliates. The facility contained a restriction of one restricted payment in an aggregate amount not to exceed the borrower's reasonable estimate of its available cash as of the end of the immediately preceding fiscal quarter and one true-up of the borrower's available cash as of the end of the immediately preceding fiscal quarter could be permitted as long as the following conditions were satisfied: no default or event of default, the 6-month debt service reserve was fully funded, and the satisfaction of a 12-month forward looking and backward looking 1.25x debt service coverage ratio test. The RCF was available for issuance of letters of credit, with a letter of credit fee equal to the applicable margin of LIBOR RCF borrowings times the daily maximum aggregate amount available to be drawn under such letter of credit payable on the undrawn portion of all letters of credit issued under the RCF. The facility was secured by (i.e. collateralized against) a first priority lien (subject to permitted encumbrances) in substantially all the existing and future tangible and intangible assets and rights of Cheniere Energy Partners, L.P. and Cheniere Energy Investments, LLC, Sabine Pass LNG, L.P., Cheniere Creole Trail Pipeline, L.P., Sabine Pass Tug Services, LLC, Cheniere Pipeline GP Interest, LLC, and Sabine Pass LNG-GP, LLC and equity interests in Cheniere Energy Investments, LLC, Sabine Pass LNG, L.P., Cheniere Creole Trail Pipeline, L.P., Sabine Pass Tug Services, LLC, Cheniere Pipeline GP Interest, LLC, and Sabine Pass LNG-GP, LLC (except, in each case, for certain excluded properties). Additionally, Cheniere Energy Investments, LLC, Sabine Pass LNG, L.P., Cheniere Creole Trail Pipeline, L.P., Sabine Pass Tug Services, LLC, Cheniere Pipeline GP Interest, LLC, and Sabine Pass LNG-GP, LLC issued unconditional guarantees for the facility. MUFG Union Bank, N.A. acted as collateral agent. Each lender, including the two Morgan Stanley branches together, reportedly contributed $25,862,068.9655 USD to each of the two $750 million USD tranches. Record ID#108300 captures BOC's contribution to the term loan tranche. Record ID#108303 captures BOC's contribution to the RCF tranche. Record ID#108301 captures ICBC's contribution to the term loan tranche. Record ID#108307 captures ICBC's contribution to the RCF tranche. Record ID#108302 captures China Merchants Bank's contribution to the term loan tranche. Record ID#108308 captures China Merchants Bank's contribution to the RCF tranche. In addition to the three Chinese state-owned banks, the following lenders contributed to the loan syndicate: ABN AMRO Capital USA LLC, the New York Branch of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), Bank of America, N.A., the New York Branch of Canadian Imperial Bank of Commerce (CIBC), Citibank, N.A., Commonwealth Bank of Australia (CBA), Crédit Agricole Corporate and Investment Bank (CACIB), the Cayman Islands Branch of Credit Suisse AG, DBS Bank Ltd., 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., Mizuho Bank, Ltd., Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., MUFG Bank, Ltd., National Australia Bank Limited (NAB), New York Branch of Natixis, Santander Bank, N.A., Royal Bank of Canada (RBC), the Houston Branch of The Bank of Nova Scotia (Scotiabank), Société Générale S.A. (SocGen), Standard Chartered Bank plc, Sumitomo Mitsui Banking Corporation (SMBC), and Wells Fargo Bank, National Association. MUFG Bank, Ltd. acted as the sole coordinating lead arranger and administrative agent. MUFG Union Bank, N.A. served as collateral agent. The New York Branch of Natixis, SocGen, the Houston Branch of SocGen, and Wells Fargo Bank served as the issuing banks. MUFG Bank, SG Americas Securities, LLC, ABN AMRO Capital USA, the New York Branch of BBVA, Bank of America, the New York Branch of BOC, the New York Branch of CIBC, the New York Branch of China Merchants Bank, Citibank, N.A., CBA, CACIB, the Cayman Islands Branch of Credit Suisse, DBS Bank, Goldman Sachs Bank USA, HSBC Bank USA, ICBC, the New York Branch of Intesa Sanpaolo, ING Capital, JPMorgan Chase Bank, Mizuho Bank, Morgan Stanley Bank, Morgan Stanley Senior Funding, NAB, the New York Branch of Natixis, RBC, SocGen, Santander Bank, Standard Chartered Bank, SMBC, the Houston Branch of Scotiabank, and Wells Fargo Bank served as joint lead arrangers. The proceeds of the term loan tranche were used by the borrower to make equity contributions or subordinated shareholder loans to the relevant subsidiary guarantor or Sabine Pass Liquefaction, LLC to finance the design, development, procurement, construction, commissioning and operation of Train 6 at the Sabine Pass Liquefaction Project, for other capital expenditures at any of Sabine Pass Liquefaction Project or Creole Trail Pipeline, including the construction of a third berth at the Sabine Pass LNG terminal, to pay related transaction fees, commissions, and expenses, and for general corporate purposes. The proceeds of the RCF tranche were used by the borrower to make equity contributions or subordinated shareholder loans to the relevant subsidiary guarantor or Sabine Pass Liquefaction for the design, development, procurement, construction, commissioning and operation of Train 6 and for general corporate purposes of borrower and its subsidiaries. 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. The project was connected to interstate pipelines through the 94-mile long Creole Trail Pipeline. Train 1 through 5 were all operational prior to June 2019, with Train 6 to mark the final liquefaction train at the facility and a new berth to handle ships. As a result of production and maintenance optimization and debottlenecking at the project, the trains could run at up to 4.9 mtpa. On June 3, 2019, the borrower drew approximately $227 million USD under the term loan tranche for Train 6 and for general corporate purposes.. Bechtel Oil, Gas and Chemicals, Inc. served as the engineering, procurement and construction (EPC) contractor under a $2.5 billion USD contract for Train 6. On May 29, 2019, Cheniere Energy Partners's board of directors approved a final investment decision (FID) for Train 6. Then, on June 3, 2019, Cheniere Energy Partners issued a notice to proceed to Bechtel Oil, Gas and Chemicals, Inc. to commence construction on Train 6. In November 2021, Train 6 produced LNG for the first time. On December 7, 2021, Train 6 produced its first LNG cargo. Train 6 reached substantial completion on February 4, 2022. The entire project, including Train 6, received criticism for emissions of air pollutants and greenhouse gases.