Item 1.01.
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Entry into a Material Definitive Agreement.
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Amended and Restated Working Capital Facility
On June 29, 2018, Cheniere Corpus Christi Holdings, LLC (the
Borrower
), Cheniere Corpus Christi Pipeline,
L.P. (
CCP
), Corpus Christi Pipeline GP, LLC (
CCP GP
) and Corpus Christi Liquefaction, LLC (
CCL
) (CCP, CCP GP and CCL collectively the
Guarantors
, and the Borrower and the
Guarantors collectively the
Loan Parties
), each indirect wholly owned subsidiaries of Cheniere Energy, Inc., entered into the Amended and Restated Working Capital Facility Agreement (the
Working Capital Facility
Agreement
) with The Bank of Nova Scotia, as Working Capital Facility Agent, Société Générale, as Security Trustee, and working capital lenders and issuing banks party thereto from time to time. The Working
Capital Facility Agreement amends and restates the Borrowers existing working capital facility agreement to provide for approximately $850 million of incremental commitments to the Loan Parties thereunder, increasing the total committed
amount under the Working Capital Facility Agreement to $1.2 billion.
The Working Capital Facility is intended to be used for loans
(
Working Capital Loans
) to, and the issuance of letters of credit (
Letters of Credit
) on behalf of, the Borrower, for certain working capital requirements related to developing and placing into operation the
Corpus Christi natural gas liquefaction facilities and Corpus Christi natural gas pipeline and related facilities near Corpus Christi, Texas (the
CCL Project
).
The Working Capital Facility will be used for (i) payment of gas purchase, transportation and storage expenses (including to meet credit
support requirements under gas purchase, transportation or storage agreements); (ii) funding of debt service reserves; (iii) other working capital and other general corporate purposes; and (iv) the payment of transaction fees and expenses.
Up to $250 million may be used for general corporate purposes. The entire amount of the Working Capital Facility will be available for the issuance of Letters of Credit.
The Working Capital Facility allows the Borrower to request incremental commitments up to the maximum allowed under the Common Terms Agreement
(as defined below) for the Working Capital Facility subject to customary conditions precedent.
Conditions Precedent to Extensions of Credit
Advances of Working Capital Loans and issuances of Letters of Credit under the Working Capital Facility are subject to customary
conditions precedent, including the absence of defaults, bring-down of certain representations and warranties, perfection of security interests, payment of applicable fees and expenses and certifications as to construction progress.
Interest and Fees
Loans under the
Working Capital Facility, including Working Capital Loans and any loans deemed made in connection with a draw upon any Letters of Credit (
LC Loans
) (collectively, the
Revolving Loans
) will bear interest at a
variable rate per annum equal to LIBOR or the base rate (the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate published in The Wall Street Journal (or if the Wall Street Jornal ceases to publish such rate, the
prime lending rate as set forth on the Bloomberg PRIMBB Index or any other service as determined by the Working Capital Facility Agent from time to time) and (c) the LIBOR for an interest
period of one month plus 0.5%), plus the applicable margin. The applicable margin for LIBOR Revolving Loans ranges from 1.25% to 1.75%, and the applicable margin for base rate Revolving Loans ranges from 0.25% to 0.75%, in each case, based on the
Borrowers debt ratings then in effect. Interest on Working Capital Loans and LC Loans is due and payable on the date such loans become due. Interest on LIBOR Revolving Loans is due and payable at the end of each LIBOR period, and interest on
base rate Revolving Loans is due and payable at the end of each calendar quarter.
The Borrower will pay (i) a commitment fee on the
average daily amount of the excess of the total commitment amount over the principal amount outstanding in an amount equal to an annual rate of 40% of the applicable margin for LIBOR loans; (ii) a letter of credit fee equal to an annual rate
equal to the applicable margin for LIBOR Revolving Loans on the undrawn portion of all Letters of Credit issued under the Working Capital Facility; and (iii) a letter of credit fronting fee to each issuing bank that has issued fronted Letters
of Credit in an amount equal to an annual rate of 0.20% of the undrawn portion of all Letters of Credit issued by such issuing bank. Each of these fees is payable quarterly in arrears. In the event that draws are made upon any Letters of Credit
issued under the Working Capital Facility and the Borrower does not elect for such draw to be deemed an LC Loan (an
LC Draw
), the Borrower is required to pay the full amount of the LC Draw on or prior to 12:00 p.m., New York City
time, on the business day immediately succeeding its timely receipt of notice of the LC Draw. Any such LC Draw shall bear interest at an annual rate equal to the base rate plus 2.0%.
In connection with the Working Capital Facility, the Borrower will pay upfront fees to the agents and lenders under the Working Capital
Facility together with additional transaction fees in the aggregate amount of approximately $[14] million. Annual administrative fees must also be paid to the Working Capital Facility Agent under the Working Capital Facility.
Repayments
The Working Capital
Facility matures on June 29, 2023 (the
Maturity Date
). LC Loans have a term of up to one year.
The Borrower is
required to reduce the aggregate outstanding principal amount of all Working Capital Loans to zero for a period of five consecutive business days at least once each year. The Borrower may prepay the Revolving Loans at any time without premium or
penalty upon three business days notice.
Covenants and Events of Default
The Working Capital Facility generally incorporates the representations, warranties, covenants, reporting requirements and mandatory prepayment
provisions of the Amended and Restated Common Terms Agreement, dated as of May 22, 2018, among the Borrower and certain other parties thereto and Société Générale, as security trustee and intercreditor agent (the
Common Terms Agreement
), which was previously disclosed in the Borrowers Current Report on Form
8-K,
filed with the Securities and Exchange Commission on May 22, 2018.
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Upon the discharge of all debt governed by the Common Terms Agreement (other than the Working Capital Facility), the representations, warranties and covenants in the Common Terms Agreement will
no longer apply and will be replaced with the representations, warranties and covenants contained in the Working Capital Facility, which address matters customary in project financings and are generally less restrictive than those in the Common
Terms Agreement. The Working Capital Facility includes customary events of default which are subject to customary grace periods and materiality standards.
Collateral
The Revolving Loans,
the Borrowers existing term loan facility, senior notes and obligations under the interest rate protection agreements entered into in connection with the term loan facility (collectively, the
Secured Obligations
) are secured
on a
pari passu
basis by a first priority lien (subject to customary permitted encumbrances) in substantially all of the assets of the Borrower and the Guarantors. In addition, the Secured Obligations are secured by a pledge of all of the
membership interests in the Borrower and each of the Guarantors. The Borrower is also required to establish and maintain certain deposit accounts which are subject to the control of Société Générale, as security trustee.
The Revolving Loan proceeds and other receipts will be deposited into these accounts or applied directly for the purposes for which they are borrowed. The liens securing the Secured Obligations are evidenced by customary mortgage and other security
documents and are subject to customary intercreditor arrangements.
The foregoing description of the Working Capital Facility does not
purport to be complete and is qualified in its entirety by reference to the full text of the Working Capital Facility agreement, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.