Item 1.01 Entry into a Material Definitive Agreement.
Twelfth Supplemental Indenture
On November 14, 2022, Sabine Pass Liquefaction, LLC, a Delaware limited liability company (“SPL”), and a wholly owned subsidiary of Cheniere Energy Partners, L.P. (the “Partnership”), entered into a Purchase Agreement (the “Purchase Agreement”) with Goldman Sachs & Co. LLC, as representative of the initial purchasers named therein (the “Initial Purchasers”), to issue and sell to the Initial Purchasers $430,000,000 aggregate principal amount of its 5.900% Senior Secured Amortizing Notes due 2037 (the “Notes”). The Notes were issued at a price equal to 99.856% of par.
On November 29, 2022 (the “Issue Date”), SPL closed the sale of the Notes pursuant to the Purchase Agreement. 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 and Rule 144A and Regulation S thereunder.
The Notes were issued on the Issue Date pursuant to the indenture, dated as of February 1, 2013 (the “Base Indenture”), by and among SPL, the guarantors that may become party thereto from time to time and The Bank of New York Mellon, as Trustee under the Indenture (the “Trustee”), as supplemented by the eighth supplemental indenture, dated as of September 19, 2016 (the “Eighth Supplemental Indenture”), and a twelfth supplemental indenture, dated as of the Issue Date, between SPL and the Trustee, relating to the Notes (the “Twelfth Supplemental Indenture”). The Base Indenture as supplemented by the Eighth Supplemental Indenture and the Twelfth Supplemental Indenture is referred to herein as the “Notes Indenture.”
Under the terms of the Twelfth Supplemental Indenture, the Notes will mature on September 15, 2037 and will accrue interest at a rate equal to 5.900% per annum on the principal amount from the Issue Date, with such interest payable semi-annually, in cash in arrears, on March 15 and September 15 of each year, beginning on March 15, 2023. The Notes are fully amortizing, with a weighted average life of approximately 9.5 years (from the date of issuance of the Notes) and amortization payments delayed until September 15, 2025.
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.
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 “make-whole” price set forth in the Twelfth Supplemental Indenture, 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.
General
The Notes Indenture also contains customary terms and events of default and certain covenants that, among other things, limit SPL’s ability and the ability of SPL’s restricted subsidiaries to incur additional indebtedness or issue preferred stock, make certain investments or pay dividends or distributions on capital stock or subordinated indebtedness or purchase, redeem or retire capital stock, sell or transfer assets, including capital stock of SPL’s restricted subsidiaries, restrict dividends or other payments by restricted subsidiaries, incur liens, enter into transactions with affiliates, dissolve, liquidate, consolidate, merge, sell or lease all or substantially all of SPL’s assets and enter into certain LNG sales contracts. The Notes Indenture covenants are subject to a number of important limitations and exceptions.
The foregoing description of the Twelfth Supplemental Indenture is qualified in its entirety by reference to the full text of the Twelfth Supplemental Indenture, which is filed as Exhibit 4.1 hereto, and is incorporated by reference herein. The foregoing description of the Notes Indenture is qualified in its entirety by reference to the full text of the Notes Indenture, which is incorporated by reference
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