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Subsequent Events
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Jun. 30, 2012
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| Subsequent Events [Abstract] | |||||||||||||||||||||
| Subsequent Events |
Subsequent Events
Offering of Common Stock
In July 2012, we sold 28.0 million shares of Cheniere common stock in an underwritten public offering for net cash proceeds of $380.3 million. We used a portion of the net proceeds from the offering, along with available cash, to repay our Convertible Senior Unsecured Notes due August 1, 2012, and will use the remaining amount for capital expenditures on the Creole Trail Pipeline and general corporate purposes.
Debt Repayment
On August 1, 2012, we paid in full the entire outstanding principal balance of the Convertible Senior Unsecured Notes using a portion of the net proceeds from the public offering of common stock in July 2012. The aggregate repayment amount was $206.9 million, including the outstanding principal amount and accrued interest through August 1, 2012.
Final Investment Decision
In July 2012, Cheniere Partners announced that its Board of Directors made a positive final investment decision on the development and construction of the first two LNG trains subject to the closing of the debt financing, funding of the initial equity investment by Blackstone CQP Holdco LP ("Blackstone"), and funding of the remaining equity investment by Cheniere.
Liquefaction Project Debt and Equity Financing
In July 2012, Sabine Pass Liquefaction closed $3.6 billion of debt financing with a syndicate of lenders (the "Liquefaction Credit Facility") to fund the costs of developing, constructing and placing into service the first two LNG trains of the liquefaction facilities adjacent to the Sabine Pass LNG terminal. The Liquefaction Credit Facility has a seven-year maturity and an interest rate of LIBOR plus 350 basis points during construction, increasing to LIBOR plus 375 basis points during operations. In addition,
Cheniere purchased $333 million of its remaining Class B Units in July 2012 for an aggregate investment of $500 million.
Long-Term Commercial Bonus Pool
In July 2012, we met the criteria to determine the Long-Term Commercial Bonus Pool that was established by the Compensation Committee of the Board of Directors in March 2011 in relation to the first two LNG trains. We anticipate that the Long-Term Commercial Bonus Pool will consist of approximately $60 million in cash awards and 10 million restricted shares of common stock.
The cash award will vest and be paid to employees 20% per year, with the first installment vesting when Sabine Pass Liquefaction, LLC issues its full notice to proceed ("NTP") under the lump sum turnkey agreement with respect to the Sabine Pass liquefaction facility. Each of the four remaining 20% portions will vest and be paid upon each annual anniversary of NTP.
The restricted stock awards will vest in five installments as follows:
In general, employees must be employed at the time of each vesting to receive the award or will otherwise forfeit such awards. Vesting and payment would accelerate in full upon (i) termination of employment by the Company without "Cause" or, solely in the case of executive officers, termination of employment by the employee for "Good Reason" (each as defined in our 2003 Stock Incentive Plan, as amended), (ii) the employee's death or disability, or (iii) the occurrence of a change of control.
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