Entry into a Material Definitive Agreement.
CQP Senior Unsecured Revolving Credit and Guaranty Agreement
On June 23, 2023, Cheniere Energy Partners, L.P. (“CQP”), a subsidiary of Cheniere Energy, Inc. (“CEI”), entered into a $1 billion Senior Unsecured Revolving Credit and Guaranty Agreement among CQP, as borrower, certain subsidiaries of CQP, as subsidiary guarantors, various lenders (the “CQP Lenders”) and issuing banks, MUFG Bank, Ltd., as coordinating lead arranger, joint bookrunner and administrative agent, and SG Americas Securities, LLC as joint bookrunner for the CQP Lenders (the “CQP Revolving Credit Facility”). The CQP Revolving Credit Facility refinances and replaces CQP’s existing revolving credit facility, dated as of May 29, 2019, to, among other things, (i) extend the maturity date thereunder, (ii) reduce the rate of interest and commitment fees applicable thereunder, and (iii) make certain other changes to the terms and conditions of the existing revolving credit facility. The CQP Lenders and their affiliates have provided and may provide, from time to time in the future, certain financial services to CQP and its affiliates, for which they may receive advisory or transaction fees, as applicable, of the nature and in amounts customary in the industry for these financial services.
100% of the CQP Revolving Credit Facility will be available to provide loans and letters of credit to CQP for the general corporate purposes of CQP and/or its subsidiaries. 100% of the aggregate amount of commitments under the CQP Revolving Credit Facility are available for the issuance of letters of credit for the account or benefit of CQP and/or its subsidiaries for general corporate purposes.
Conditions Precedent to Extensions of Credit
Advances and issuances of letters of credit under the CQP Revolving Credit Facility are subject to customary conditions precedent, including the absence of defaults and the accuracy of certain representations and warranties.
Covenants and Events of Default
The CQP Revolving Credit Facility contains no financial covenants.
The CQP Revolving Credit Facility includes representations, warranties and affirmative covenants customary for companies like CQP with lenders of the type participating in the CQP Revolving Credit Facility, including, among others, covenants relating to compliance with laws. Negative covenants are limited to conditions to the making of restricted payments, including dividends, and limitations on indebtedness, liens, fundamental changes, hedging, and affiliate transactions. These covenants are subject to certain materiality qualifiers, reasonableness standards, thresholds, grace periods and exceptions.
In addition, the CQP Revolving Credit Facility includes customary events of default (including non-payment, cross acceleration of indebtedness of CQP or certain subsidiaries of CQP in excess of $500 million, breach of representations, warranties and covenants, unsatisfied judgments in excess of $500 million, and a change of control of CQP), which are subject to customary grace periods and materiality standards.
Interest and Fees
Loans under the CQP Revolving Credit Facility will bear interest at a variable rate per annum equal to SOFR or the base rate (the highest of (a) the prime rate published in The Wall Street Journal, (b) the federal funds rate plus 0.50%, and (c) Term SOFR for an interest period of one month plus 1.00%), plus the applicable margin. The applicable margin for SOFR loans ranges from 1.125% to 2.00% per annum, and the applicable margin for base rate loans ranges from 0.125% to 1.00% per annum, in each case, based on the credit ratings then in effect assigned to loans under the CQP Revolving Credit Facility. Based on current credit ratings for CQP, the applicable margins for SOFR loans and base rate loans are 1.50% and 0.50%, respectively. Interest on SOFR loans is due and payable at the end of each SOFR period, and interest on base rate loans is due and payable at the end of each calendar quarter.