Quarterly report pursuant to Section 13 or 15(d)

Debt (Tables)

v3.4.0.3
Debt (Tables)
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
Schedule of Debt Instruments
As of March 31, 2016 and December 31, 2015, our debt consisted of the following (in thousands): 
 
 
March 31,
 
December 31,
 
 
2016
 
2015
Long-term debt:
 
 
 
 
SPLNG
 
 
 
 
6.50% Senior Secured Notes due 2020 (“2020 SPLNG Senior Notes”) (1)
 
$
420,000

 
$
420,000

SPL
 
 
 


5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”), net of unamortized premium of $8,341 and $8,718
 
2,008,341

 
2,008,718

6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
 
1,000,000

 
1,000,000

5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”), net of unamortized premium of $6,212 and $6,392
 
1,506,212

 
1,506,392

5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
 
2,000,000

 
2,000,000

5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
 
2,000,000

 
2,000,000

2015 SPL Credit Facilities
 
1,505,000

 
845,000

CTPL
 
 
 
 
$400.0 million Term Loan Facility (“CTPL Term Loan”), net of unamortized discount of zero and $1,429
 

 
398,571

Cheniere Partners
 
 
 
 
2016 CQP Credit Facilities
 
450,000

 

CCH
 
 
 
 
2015 CCH Credit Facility
 
3,386,000

 
2,713,000

CCH HoldCo II
 
 
 
 
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
 
1,079,479

 
1,050,588

Cheniere
 
 
 
 
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”), net of unamortized discount of $165,738 and $174,095
 
888,296

 
879,938

4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”), net of unamortized discount of $318,535 and $319,062
 
306,465

 
305,938

Unamortized debt issuance costs (2)
 
(201,694
)
 
(207,718
)
Total long-term debt, net
 
16,348,099

 
14,920,427

 
 
 
 
 
Current debt:
 
 
 
 
7.50% Senior Secured Notes due 2016 (“2016 SPLNG Senior Notes”), net of unamortized discount of $3,130 and $4,303 (3)
 
1,662,370

 
1,661,197

$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
 
125,000

 
15,000

Unamortized debt issuance costs (2)
 
(2,052
)
 
(2,818
)
Total current debt, net
 
1,785,318

 
1,673,379

 
 
 
 
 
Total debt, net
 
$
18,133,417

 
$
16,593,806

 
(1)
Must be redeemed or repaid concurrently with the 2016 Senior Notes under the terms of the 2016 CQP Credit Facilities if the obligations under the 2016 Senior Notes are satisfied with borrowings under the 2016 CQP Credit Facilities.
(2)
Effective January 1, 2016, we adopted ASU 2015-03 and ASU 2015-15, which require debt issuance costs related to term notes to be presented in the balance sheet as a direct deduction from the debt liability, rather than as an asset, retrospectively for each reporting period presented. As a result, we reclassified $207.8 million and $2.8 million from debt issuance costs, net to long-term debt, net and current debt, net, respectively, as of December 31, 2015.
(3)
Matures on November 30, 2016. We currently anticipate satisfying this obligation with borrowings under the 2016 CQP Credit Facilities
Schedule of Line of Credit Facilities
Below is a summary of our credit facilities outstanding as of March 31, 2016 (in thousands):
 
 
2015 SPL Credit Facilities
 
SPL Working Capital Facility
 
2016 CQP Credit Facilities
 
2015 CCH Term Loan Facilities
Total facility size
 
$
4,600,000

 
$
1,200,000

 
$
2,800,000

 
$
8,403,714

Outstanding balance
 
1,505,000

 
125,000

 
450,000

 
3,386,000

Letters of credit issued
 

 
236,459

 
7,500

 

Available commitment
 
$
3,095,000

 
$
838,541

 
$
2,342,500

 
$
5,017,714

 
 
 
 
 
 
 
 
 
Interest rate
 
LIBOR plus 1.30% - 1.75% or base rate plus 1.75%
 
LIBOR plus 1.75% or base rate plus 0.75%
 
LIBOR plus 2.25% or base rate plus 1.25% (1)
 
LIBOR plus 2.25% or base rate plus 1.25% (2)
Maturity date
 
Earlier of December 31, 2020 or second anniversary of SPL Trains 1 through 5 completion date
 
December 31, 2020, with various terms for underlying loans
 
February 25, 2020, with principals due quarterly commencing on February 19, 2019
 
Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date
 
(1)
There is a 0.50% step-up for both LIBOR and base rate loans beginning on February 25, 2019.
(2)
There is a 0.25% step-up for both LIBOR and base rate loans following completion of the first two Trains of the CCL Project.
Schedule of Convertible Debt
Below is a summary of our convertible notes outstanding as of March 31, 2016 (in thousands):
 
 
2021 Cheniere Convertible Unsecured Notes
 
2025 CCH HoldCo II Convertible Senior Notes
 
2045 Cheniere Convertible Senior Notes
Aggregate principal
 
$
1,000,000

 
$
1,000,000

 
$
625,000

Debt component, net of discount
 
$
888,296

 
$
1,079,479

 
$
306,465

Equity component
 
$
203,035

 
$

 
$
194,082

Interest payment method
 
Paid-in-kind

 
Paid-in-kind (1)

 
Cash

Conversion by us (2)
 

 
(3)

 
(4)

Conversion by holders (2)
 
(5)

 
(6)

 
(7)

Conversion basis
 
Cash and/or stock

 
Stock

 
Cash and/or stock

Conversion value in excess of principal
 
$

 
$

 
$

Maturity date
 
May 28, 2021

 
March 1, 2025

 
March 15, 2045

Effective interest rate
 
9.6
%
 
11.9
%
 
9.4
%
Remaining debt discount and debt issuance costs amortization period (8)
 
5.2 years

 
4.5 years

 
29.0 years

 
(1)
Prior to the substantial completion of Train 2 of the CCL Project, interest will be paid entirely in kind. Following this date, the interest generally must be paid in cash; however, a portion of the interest may be paid in kind under certain specified circumstances.
(2)
Conversion is subject to various limitations and conditions.
(3)
Convertible on or after the later of March 1, 2020 and the substantial completion of Train 2 of the CCL Project, provided that our market capitalization is not less than $10.0 billion (“Eligible Conversion Date”). The conversion price is the lower of (1) a 10% discount to the average of the daily volume-weighted average price (“VWAP”) of our common stock for the 90 trading day period prior to the date notice is provided, and (2) a 10% discount to the closing price of our common stock on the trading day preceding the date notice is provided.
(4)
Redeemable at any time after March 15, 2020 at a redemption price payable in cash equal to the accreted amount of the 2045 Cheniere Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.
(5)
Initially convertible at $93.64 (subject to adjustment upon the occurrence of certain specified events), provided that the closing price of our common stock is greater than or equal to the conversion price on the conversion date.
(6)
Convertible on or after the six-month anniversary of the Eligible Conversion Date, provided that our total market capitalization is not less than $10.0 billion, at a price equal to the average of the daily VWAP of our common stock for the 90 trading day period prior to the date on which notice of conversion is provided.
(7)
Prior to December 15, 2044, convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal 7.2265 shares of our common stock per $1,000 principal amount of the 2045 Cheniere Convertible Senior Notes, which corresponds to an initial conversion price of approximately $138.38 per share of our common stock (subject to adjustment upon the occurrence of certain specified events).
(8)
We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible into our common stock.

Schedule of Interest Expense
Total interest expense, including interest expense related to our convertible notes, consisted of the following (in thousands):
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Interest cost on convertible notes:
 
 
 
 
Interest per contractual rate
 
$
49,040

 
$
13,939

Amortization of debt discount
 
8,885

 
6,598

Amortization of debt issuance costs
 
1,151

 
14

Total interest cost related to convertible notes
 
59,076

 
20,551

Interest cost on other debt
 
234,216

 
160,087

Total interest cost
 
293,292

 
180,638

Capitalized interest
 
(216,955
)
 
(121,026
)
Total interest expense, net
 
$
76,337

 
$
59,612

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
The following table (in thousands) shows the carrying amount and estimated fair value of our debt:
 
 
March 31, 2016
 
December 31, 2015
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
Senior Notes, net of premium or discount (1)
 
$
10,596,923

 
$
10,299,660

 
$
10,596,307

 
$
9,525,809

CTPL Term Loan, net of discount (2)
 

 

 
398,571

 
400,000

Credit facilities (2) (3)
 
5,466,000

 
5,466,000

 
3,573,000

 
3,573,000

2021 Cheniere Convertible Unsecured Notes, net of discount (4)
 
888,296

 
858,091

 
879,938

 
825,413

2025 CCH HoldCo II Convertible Senior Notes (4)
 
1,079,479

 
1,071,219

 
1,050,588

 
914,363

2045 Cheniere Convertible Senior Notes, net of discount (5)
 
306,465

 
334,375

 
305,938

 
331,919

 
(1)
Includes 2016 SPLNG Senior Notes, net of discount; 2020 SPLNG Senior Notes; 2021 SPL Senior Notes, net of premium; 2022 SPL Senior Notes; 2023 SPL Senior Notes, net of premium; 2024 SPL Senior Notes and 2025 SPL Senior Notes (collectively, the “Senior Notes”). The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of our Senior Notes and other similar instruments.
(2)
The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty. 
(3)
Includes 2015 SPL Credit Facilities, SPL Working Capital Facility, 2016 CQP Credit Facilities and 2015 CCH Credit Facility.
(4)
The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market. 
(5)
The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.