Cheniere Taps 13 Banks for Sabine Pass Debt Refinancing

Updated on
  • Houston company seeking new terms for $2.52 billion in debt
  • With fees and expenses, Cheniere borrowing up to $2.8 billion

Natural-gas terminal developer Cheniere Energy Inc. is using 13 banks and advisers to help it refinance debt tied to its Sabine Pass liquefied natural gas import facility and a pipeline.

The Houston-based company is seeking to refinance a $400 million loan at Cheniere Creole Trail Pipeline LP, redeem or repay about $1.7 billion in senior secured notes due this year and $420 million due in 2020 issued by Sabine Pass LNG LP, according to a statement Monday. Debt to be refinanced totals as much as $2.52 billion. With transaction fees and expenses, the company said it will borrow as much as $2.8 billion.

Cheniere, which is seeking to export the first cargo of U.S. shale gas this year, owes about $2.1 billion on the import facility in Louisiana, with $1.67 billion due in November, according to a Jan. 21 company presentation. Thanks to the U.S. shale boom, the import complex became redundant the moment it was brought online in 2009. U.S. gas production is expected to climb in 2016 for the 11th straight year, and futures that soared to more than $13 per million British thermal units in mid-2008 plunged in December to a 16-year low.

Earlier this month, the company said the first LNG export cargo would be delayed by as much as two months because of faulty wiring. It now plans to ship its first LNG cargo from Sabine Pass in late February or March, missing its previous estimate of the third week of January.

The banks and advisers engaged in the debt refinancing include Societe Generale SA, Mitsubishi UFJ Financial Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Credit Suisse Group AG.

Cheniere slid 7.1 percent on Monday to close at $29.39 in New York.