A $500 million "B" loan financing Cheniere Energy is in the market after market vagaries caused the company to shelve an earlier financing push. A Credit Suisse First Boston-led similarly sized bond offering was scuppered by the capital market reaction the General Motors Corp. rating slide (PFR, 5/1). The loan will be used to help fund an expansion of its LNG facilities in the Gulf of Mexico. David Castaneda, investor relations manager at the LNG developer in Houston, declined to comment on the loan.
Swami Venkataraman, an analyst at Standard & Poor's, said the "B"-loan market likely will be more amenable for Cheniere. The loan likely will be priced at LIBOR plus 3 1/ 4% and mature in seven years. Additional details about the structure could not be learned by press time. Officials at CSFB, which is also leading the "B" loan, did not return phone calls.
The developer's projects are on schedule, Castaneda said, and set to begin operation in 2008. Sabine Pass project in Louisiana and the Freeport project in Texas are under construction and the company has filed for regulatory approval to expand of both terminals. Proceeds also will be used to fund a reserve to cover debt service payments during the four-year period before distributions are expected to begin from the Sabine Pass LNG terminal.