Cheniere Energy, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Debt (Tables)

Debt (Tables)

9 Months Ended

Sep. 30, 2021

As of September 30, 2021 and December 31, 2020, our debt consisted of the following (in millions):



	September 30,		December 31,
	2021		2020
Long-term debt:











SPL — 4.200% to 6.25% senior secured notes due between March 2022 and September 2037 and working capital facility (“2020 SPL Working Capital Facility”) (1)	$	13,128	$	13,650







Cheniere Partners — 3.250% to 5.625% senior notes due between October 2025 and January 2032 and credit facilities (“2019 CQP Credit Facilities”)	4,200		4,100










CCH — 2.742% to 7.000% senior secured notes due between June 2024 and December 2039 and CCH Credit Facility	10,128		10,217







Cheniere — 4.625% senior secured notes due October 2028 (the “2028 Cheniere Senior Notes”), convertible notes, revolving credit facility (“Cheniere Revolving Credit Facility”) and term loan facility (“Cheniere Term Loan Facility”)	2,625		3,145
Unamortized premium, discount and debt issuance costs, net of accumulated amortization	(600)		(641)
Total long-term debt, net of premium, discount and debt issuance costs	29,481		30,471

Current debt:
SPL — current portion of 6.25% senior secured notes due March 2022 (the “2022 SPL Senior Notes”) (1) (2)	522		—
Cheniere Partners — current portion of 5.625% senior notes due October 2026 (the “2026 CQP Senior Notes”) (3)	428		—
CCH — $1.2 billion CCH working capital facility (“CCH Working Capital Facility”) and current portion of CCH Credit Facility	104		271
Cheniere Marketing — trade finance facilities and letter of credit facility	—		—
Cheniere — current portion of the 4.875% convertible unsecured notes due May 2021 (“2021 Cheniere Convertible Notes”)	—		104
Unamortized discount and debt issuance costs, net of accumulated amortization	(7)		(3)
Total current debt, net of discount and debt issuance costs	1,047		372

Total debt, net of premium, discount and debt issuance costs	$	30,528	$	30,843

(1)A portion of the 2022 SPL Senior Notes is categorized as long-term debt because the proceeds from the expected series of sales of approximately $482 million aggregate principal amount of senior secured notes due 2037 pursuant to executed note purchase agreements, expected to be issued in the fourth quarter of 2021, subject to customary closing conditions, will be used to strategically refinance a portion of the 2022 SPL Senior Notes and pay related fees, costs and expenses.

(2)In October 2021, $318 million of the 2022 SPL Senior Notes was redeemed with $100 million from the proceeds from Cheniere Partners’ issuance of the 3.250% senior notes due 2032 (the “2032 CQP Senior Notes”) and $218 million of cash on hand. See Issuances, Redemptions and Repayments section below for further discussion.

(3)In October 2021, Cheniere Partners redeemed the remaining outstanding aggregate principal amount of the 2026 CQP Senior Notes that were not purchased pursuant to the tender offer and consent solicitation in September 2021. See Issuances, Redemptions and Repayments section below for further discussion.

Schedule Of Debt Issuances, Redemptions And Repayments

The following table shows the issuances, redemptions and repayments of long-term debt during the nine months ended September 30, 2021, excluding intra-quarter borrowings and repayments (in millions):


Issuances	Principal Amount Issued
Three Months Ended March 31, 2021
Cheniere Partners — 4.000% Senior Notes due 2031 (the “2031 CQP Senior Notes”) (1)	$	1,500

Three Months Ended June 30, 2021
Cheniere — Cheniere Term Loan Facility (2)	220
Cheniere — Cheniere Revolving Credit Facility	134

Three Months Ended September 30, 2021
CCH — 2.742% Senior Notes due 2039 (the “2.742% CCH Senior Secured Notes”) (3)	750


Cheniere Partners — 2032 CQP Senior Notes (4)	1,200
Nine Months Ended September 30, 2021 total	$	3,804

Redemptions and Repayments	Principal Amount Redeemed/Repaid
Three Months Ended March 31, 2021
Cheniere Partners — 5.250% Senior Notes due 2025 (the “2025 CQP Senior Notes”) (1)	$	1,500
Cheniere — Cheniere Term Loan Facility (5)	148

Three Months Ended June 30, 2021
Cheniere — 2021 Cheniere Convertible Notes (2)	476
Cheniere — Cheniere Term Loan Facility (2)	220

Three Months Ended September 30, 2021
Cheniere — Cheniere Revolving Credit Facility	134
CCH — CCH Credit Facility (3)	866
Cheniere Partners — 2026 CQP Senior Notes (4)	672
Nine Months Ended September 30, 2021 total	$	4,016

(1)Net proceeds from the issuance of the 2031 CQP Senior Notes, together with cash on hand, were used to redeem all of Cheniere Partners’ outstanding 2025 CQP Senior Notes, resulting in $54 million of loss on extinguishment of debt relating to the payment of early redemption fees and write off of unamortized debt premium and issuance costs.

(2)The 2021 Cheniere Convertible Notes were repaid using a combination of borrowings under the Cheniere Term Loan Facility and cash on hand upon the maturity date at par value.

(3)Net proceeds of the 2.742% CCH Senior Secured Notes, together with cash on hand, were used to prepay a portion of the principal amount outstanding under the CCH Credit Facility, resulting in $9 million of loss on extinguishment of debt relating to the payment of early redemption fees and write off of unamortized issuance costs.

(4)Net proceeds from the issuance of the 2032 CQP Senior Notes were used to redeem a portion of the 2026 CQP Senior Notes in September 2021 pursuant to a tender offer and consent solicitation, resulting in $27 million of loss on extinguishment of debt relating to the payment of early redemption fees and write off of unamortized debt premium and issuance costs. In October 2021, the remaining net proceeds from the issuance of the 2032 CQP Senior Notes were used to redeem the remaining outstanding principal amount of the 2026 CQP Senior Notes and, together with cash on hand, redeem $318 million of the 2022 SPL Senior Notes.

(5)The remaining commitments under the Cheniere Term Loan Facility were terminated in accordance with the credit agreement, resulting in $4 million of loss on extinguishment of debt relating to the write off of unamortized issuance costs.

Schedule of Line of Credit Facilities and Delayed Draw Term Loan

Below is a summary of our credit facilities outstanding as of September 30, 2021 (in millions):


	2020 SPL Working Capital Facility (1)		2019 CQP Credit Facilities		CCH Credit Facility		CCH Working Capital Facility		Cheniere Revolving Credit Facility
Original facility size	$	1,200	$	1,500	$	8,404	$	350	$	750
Incremental commitments	—		—		1,566		850		500
Less:
Outstanding balance	—		—		1,761		—		—
Commitments prepaid or terminated	—		750		8,209		—		—
Letters of credit issued	396		—		—		360		—
Available commitment	$	804	$	750	$	—	$	840	$	1,250

Priority ranking	Senior secured		Senior secured		Senior secured		Senior secured		Senior secured
Interest rate on available balance	LIBOR plus 1.125% - 1.750% or base rate plus 0.125% - 0.750%		LIBOR plus 1.25% - 2.125% or base rate plus 0.25% - 1.125%		LIBOR plus 1.75% or base rate plus 0.75%		LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75%		LIBOR plus 1.75% - 2.50% or base rate plus 0.75% - 1.50%
Weighted average interest rate of outstanding balance	n/a		n/a		1.83%		n/a		n/a
Maturity date	March 19, 2025		May 29, 2024		June 30, 2024		June 29, 2023		December 13, 2022

(1)The 2020 SPL Working Capital Facility contains customary conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. SPL pays a commitment fee equal to an annual rate of 0.1% to 0.3% (depending on the then-current rating of SPL), which accrues on the daily amount of the total commitment less the sum of (1) the outstanding principal amount of loans, (2) letters of credit issued and (3) the outstanding principal amount of swing line loans.

Schedule of Convertible Debt

Below is a summary of our convertible notes outstanding as of September 30, 2021 (in millions):


	2045 Cheniere Convertible Senior Notes



Aggregate original principal	$	625

Debt component, net of discount and debt issuance costs	$	320
Equity component	$	194
Interest payment method	Cash
Conversion by us (1)	(2)
Conversion by holders (1)	(3)
Conversion basis	Cash and/or stock
Conversion value in excess of principal	$	—
Maturity date	March 15, 2045
Contractual interest rate	4.25		%
Effective interest rate (4)	9.4		%
Remaining debt discount and debt issuance costs amortization period (5)	23.5 years

(1)Conversion is subject to various limitations and conditions, which have not been met as of the balance sheet date.

(2)Redeemable at any time at a redemption price payable in cash equal to the accreted amount of the $625 million aggregate principal amount of the 2045 Cheniere Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.

(3)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).

(4)Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.

(5)We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity.

Schedule of Interest Expense

Total interest expense, net of capitalized interest, including interest expense related to our convertible notes, consisted of the following (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest cost on convertible notes:
Interest per contractual rate	$	6	$	20	$	29	$	140
Amortization of debt discount	1		7		9		41
Amortization of debt issuance costs	—		1		—		8
Total interest cost related to convertible notes	7		28		38		189
Interest cost on debt and finance leases excluding convertible notes	391		388		1,178		1,167
Total interest cost	398		416		1,216		1,356
Capitalized interest	(34)		(61)		(128)		(182)
Total interest expense, net of capitalized interest	$	364	$	355	$	1,088	$	1,174

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table shows the carrying amount and estimated fair value of our debt (in millions):


	September 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Senior notes — Level 2 (1)	$	25,978	$	28,565	$	24,700	$	27,897
Senior notes — Level 3 (2)	2,771		3,317		2,771		3,423
Credit facilities — Level 3 (3)	1,761		1,761		2,915		2,915
2021 Cheniere Convertible Notes — Level 3 (2)	—		—		476		480

2045 Cheniere Convertible Senior Notes — Level 1 (4)	625		538		625		496

(1)The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.

(2)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.

(3)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. (4)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.