Private Placement and
Redemption
On December 15, 2022 (the “Issue Date”), Sabine Pass
Liquefaction, LLC, a Delaware limited liability company (“SPL”), a
subsidiary of Cheniere Energy, Inc. (“Cheniere”), closed the sale
of $70 million aggregate principal amount of senior secured
notes with an interest rate equal to 6.293% (the “Notes”). SPL
intends to use the net proceeds from the Notes to repay a portion
of its 5.625% Senior Secured Notes due 2023 (the “2023 Notes”) and
pay certain fees, costs and expenses incurred in connection with
the sale of the Notes.
On November 30, 2022, SPL issued an irrevocable notice of
redemption to holders of its 2023 Notes for the redemption of all
of its outstanding 2023 Notes in accordance with the terms of the
indenture governing the 2023 Notes. The redemption date for the
2023 Notes will be December 30, 2022. The redemption price for
the 2023 Notes will be equal to the greater of (1) 100% of the
principal amount of such 2023 SPL Notes and (2) the sum of the
present values of the remaining scheduled payments of principal and
interest on such 2023 SPL Notes from the redemption date to
January 15, 2023 (not including any portion of such payments
of interest accrued as of the redemption date) discounted back to
the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the
Treasury Rate (as such term is defined in the Indenture) plus 50
basis points. After such redemption, no 2023 Notes will remain
outstanding. SPL intends to fund the redemption with the proceeds
from the Notes and cash on hand. The foregoing does not constitute
a notice of redemption with respect to the 2023 SPL Notes.
The sale of the Notes was not registered under the Securities Act
of 1933, as amended (the “Securities Act”), and the Notes were sold
on a private placement basis in reliance on Section 4(a)(2) of
the Securities Act.
The Notes are fully amortizing, with a weighted average life of
approximately 9.6 years (from the date of issuance of the Notes)
and amortization payments delayed until September 15, 2025.
The Notes will mature on September 15, 2037. Interest on the
Notes is payable semi-annually, in cash in arrears, on
March 15 and September 15 of each year, beginning on
March 15, 2023.
The Notes are senior secured obligations of SPL and rank senior in
right of payment to any and all of SPL’s future indebtedness that
is subordinated in right of payment to the Notes and equal in right
of payment with all of SPL’s existing and future indebtedness
(including all obligations under SPL’s senior working capital
revolving credit and letter of credit reimbursement agreement and
all of SPL’s outstanding senior secured notes) that is senior and
secured by the same collateral securing the Notes. The Notes are
effectively senior to all of SPL’s senior indebtedness that is
unsecured to the extent of the value of the assets constituting the
collateral securing the Notes. The indentures (and, where
applicable, supplements) governing the Notes contain customary
terms, covenants and events of default consistent with SPL’s
existing senior secured notes.
As of the Issue Date, the Notes were not guaranteed but will be
guaranteed in the future by all of SPL’s future restricted
subsidiaries. Such guarantees will be joint and several obligations
of the guarantors of the Notes. The guarantees of the Notes will be
senior secured obligations of the guarantors.
At any time or from time to time prior to March 15, 2037, SPL
may redeem all or a part of the Notes, at a redemption price equal
to the “optional redemption price” set forth in the applicable
indenture governing such Notes, plus accrued and unpaid interest,
if any, to the date of redemption. SPL also may at any time on or
after March 15, 2037, redeem the Notes, in whole or in part,
at a redemption price equal to 100% of the principal amount of the
Notes to be redeemed, plus accrued and unpaid interest, if any, to
the date of redemption.
Forward-Looking
Statements
This current report on Form 8-K contains certain statements that
may include “forward-looking statements.” All statements, other
than statements of historical or present facts or conditions,
included herein are “forward-looking statements.” Included among
“forward-looking statements” are, among other things,
(i) statements regarding the intended use of proceeds of the
Notes and anticipated redemption, (ii) statements regarding
potential financing arrangements, and (iii) statements
regarding future discussions and entry into contracts. Although
Cheniere believes that the expectations reflected in these
forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Cheniere’s actual results could differ
materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in Cheniere’s periodic reports that are filed with and
available from the Securities and Exchange Commission. You should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this filing. Other than as required
under the securities laws, Cheniere does not assume a duty to
update these forward-looking statements.