China Merchants Bank contributes to a $2.6 billion USD syndicated loan to Blackstone CQP Holdco for refinancing purposes related to the Sabine Pass Liquefaction Project

Project narrative

On June 20, 2019, financial close was reached on a deal in which a syndicate of eight lenders — including China Merchants Bank Co., Ltd. — entered into a $2.6 billion USD syndicated senior secured term loan B agreement with 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 — for refinancing purposes. This loan carried a maturity period of five years and three months (5.25 years), a final maturity date of September 24, 2024, and an interest rate based on LIBOR plus a margin of 350 basis points (bps). In addition to China Merchants Bank, the following lenders contributed to the loan syndicate: Barclays Bank PLC, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada (RBC), Credit Suisse Loan Funding LLC, Perella Weinberg Partners LP, Jefferies Finance LLC, and Blackstone Advisory Partners L.P. Morgan Stanley Senior Funding, Blackstone Advisory Partners, Credit Suisse Loan Funding, Jefferies Finance, Barclays Bank, RBC, and Perella Weinberg Partners served as lead arrangers. Morgan Stanley Senior Funding served as administrative agent and collateral agent. The loan was launched as a $2.5 billion USD loan in May 2019. By June 11, 2019, the loan had been up-sized to $2.6 billion USD. The proceeds of the loan were used by the borrower to repay existing notes and refinance its capital structure and fund a dividend distribution to its sponsor Blackstone of at least $292 million USD. BXCQP was a holding company with its sole substantial asset being its then-40.5% stake in Cheniere Energy Partners L.P. (CQP), which owned the Sabine Pass LNG terminal and the 94-mile Creole Trail Pipeline in Cameron Parish, Louisiana. 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. At the time of the loan, there were five operational LNG trains.