| Debt |
DEBT
As of March 31, 2018 and December 31, 2017, our debt consisted of the following (in millions):
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March 31, |
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December 31, |
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2018 |
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2017 |
Long-term debt: |
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SPL |
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5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”), net of unamortized premium of $5 and $6 |
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$ |
2,005 |
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$ |
2,006 |
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6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”) |
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1,000 |
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1,000 |
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5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”), net of unamortized premium of $5 and $5 |
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1,505 |
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1,505 |
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5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”) |
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2,000 |
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2,000 |
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5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”) |
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2,000 |
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2,000 |
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5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”) |
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1,500 |
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1,500 |
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5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”) |
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1,500 |
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1,500 |
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4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”), net of unamortized discount of $1 and $1 |
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1,349 |
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1,349 |
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5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”) |
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800 |
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800 |
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Cheniere Partners |
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5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”) |
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1,500 |
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1,500 |
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2016 CQP Credit Facilities |
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1,090 |
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1,090 |
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CCH |
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7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”) |
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1,250 |
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1,250 |
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5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”) |
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1,500 |
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1,500 |
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5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”) |
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1,500 |
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1,500 |
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2015 CCH Credit Facility |
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2,751 |
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2,485 |
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CCH HoldCo II |
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11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”) |
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1,341 |
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1,305 |
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Cheniere |
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4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”), net of unamortized discount of $114 and $121 |
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1,047 |
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1,040 |
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4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”), net of unamortized discount of $314 and $314 |
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311 |
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311 |
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$750 million Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”) |
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— |
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— |
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Unamortized debt issuance costs |
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(293 |
) |
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(305 |
) |
Total long-term debt, net |
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25,656 |
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25,336 |
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Current debt: |
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$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”) |
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— |
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— |
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$350 million CCH Working Capital Facility (“CCH Working Capital Facility”) |
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— |
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— |
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Cheniere Marketing trade finance facilities |
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— |
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— |
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Total current debt |
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— |
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— |
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Total debt, net |
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$ |
25,656 |
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$ |
25,336 |
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Credit Facilities
Below is a summary of our credit facilities outstanding as of March 31, 2018 (in millions):
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SPL Working Capital Facility |
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2016 CQP Credit Facilities |
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2015 CCH Credit Facility |
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CCH Working Capital Facility |
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Cheniere Revolving Credit Facility |
Original facility size |
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$ |
1,200 |
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$ |
2,800 |
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$ |
8,404 |
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$ |
350 |
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$ |
750 |
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Less: |
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Outstanding balance |
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— |
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1,090 |
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2,751 |
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— |
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— |
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Commitments prepaid or terminated |
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— |
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1,470 |
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3,832 |
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— |
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— |
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Letters of credit issued |
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706 |
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20 |
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— |
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289 |
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— |
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Available commitment |
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$ |
494 |
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$ |
220 |
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$ |
1,821 |
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$ |
61 |
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$ |
750 |
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Interest rate |
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LIBOR plus 1.75% or base rate plus 0.75% |
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LIBOR plus 2.25% or base rate plus 1.25% (1) |
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LIBOR plus 2.25% or base rate plus 1.25% (2) |
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LIBOR plus 1.50% - 2.00% or base rate plus 0.50% - 1.00% |
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LIBOR plus 3.25% or base rate plus 2.25% |
Maturity date |
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December 31, 2020, with various terms for underlying loans |
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February 25, 2020, with principal payments due quarterly commencing on March 31, 2019 |
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Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date |
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December 14, 2021, with various terms for underlying loans |
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March 2, 2021 |
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(1) |
There is a 0.50% step-up for both LIBOR and base rate loans beginning on February 25, 2019.
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(2) |
There is a 0.25% step-up for both LIBOR and base rate loans following the completion of Trains 1 and 2 of the CCL Project as defined in the common terms agreement.
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Convertible Notes
Below is a summary of our convertible notes outstanding as of March 31, 2018 (in millions):
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2021 Cheniere Convertible Unsecured Notes |
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2025 CCH HoldCo II Convertible Senior Notes |
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2045 Cheniere Convertible Senior Notes |
Aggregate original principal |
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$ |
1,000 |
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$ |
1,000 |
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$ |
625 |
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Debt component, net of discount |
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$ |
1,047 |
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$ |
1,341 |
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$ |
311 |
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Equity component |
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$ |
206 |
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$ |
— |
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$ |
194 |
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Interest payment method |
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Paid-in-kind |
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Paid-in-kind (1) |
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Cash |
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Conversion by us (2) |
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— |
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(3) |
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(4) |
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Conversion by holders (2) |
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(5) |
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(6) |
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(7) |
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Conversion basis |
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Cash and/or stock |
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Stock |
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Cash and/or stock |
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Conversion value in excess of principal |
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$ |
— |
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$ |
— |
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$ |
— |
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Maturity date |
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May 28, 2021 |
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March 1, 2025 |
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March 15, 2045 |
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Contractual interest rate |
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4.875 |
% |
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11.0 |
% |
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4.25 |
% |
Effective interest rate (8) |
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8.3 |
% |
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11.9 |
% |
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9.4 |
% |
Remaining debt discount and debt issuance costs amortization period (9) |
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3.2 years |
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2.5 years |
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27.0 years |
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(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. |
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(2) |
Conversion is subject to various limitations and conditions. |
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(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.
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(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. |
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(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.
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(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.
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(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 $138.38 per share of our common stock (subject to adjustment upon the occurrence of certain specified events).
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(8) |
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period. |
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(9) |
We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible by holders into our common stock.
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Restrictive Debt Covenants
As of March 31, 2018, each of our issuers was in compliance with all covenants related to their respective debt agreements.
Interest Expense
Total interest expense, including interest expense related to our convertible notes, consisted of the following (in millions):
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Three Months Ended March 31, |
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2018 |
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2017 |
Interest cost on convertible notes: |
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Interest per contractual rate |
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$ |
58 |
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$ |
53 |
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Amortization of debt discount |
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8 |
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7 |
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Amortization of debt issuance costs |
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2 |
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2 |
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Total interest cost related to convertible notes |
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68 |
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62 |
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Interest cost on debt excluding convertible notes |
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336 |
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|
292 |
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Total interest cost |
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404 |
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354 |
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Capitalized interest |
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(188 |
) |
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(189 |
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Total interest expense, net |
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$ |
216 |
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$ |
165 |
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Fair Value Disclosures
The following table shows the carrying amount and estimated fair value of our debt (in millions):
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March 31, 2018 |
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December 31, 2017 |
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Carrying
Amount |
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Estimated
Fair Value |
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Carrying
Amount |
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Estimated
Fair Value |
Senior notes, net of premium or discount (1) |
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$ |
18,609 |
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$ |
19,557 |
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$ |
18,610 |
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$ |
20,075 |
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2037 SPL Senior Notes (2) |
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800 |
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|
838 |
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800 |
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|
871 |
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Credit facilities (3) |
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3,841 |
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3,841 |
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3,575 |
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3,575 |
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2021 Cheniere Convertible Unsecured Notes, net of discount (2) |
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1,047 |
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1,152 |
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1,040 |
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1,136 |
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2025 CCH HoldCo II Convertible Senior Notes (2) |
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1,341 |
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1,521 |
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1,305 |
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1,535 |
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2045 Cheniere Convertible Senior Notes, net of discount (4) |
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311 |
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|
485 |
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|
311 |
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|
447 |
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(1) |
Includes 2021 SPL Senior Notes, 2022 SPL Senior Notes, 2023 SPL Senior Notes, 2024 SPL Senior Notes, 2025 SPL Senior Notes, 2026 SPL Senior Notes, 2027 SPL Senior Notes, 2028 SPL Senior Notes, 2025 CQP Senior Notes, 2024 CCH Senior Notes, 2025 CCH Senior Notes and 2027 CCH Senior Notes. 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.
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(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. |
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(3) |
Includes SPL Working Capital Facility, 2016 CQP Credit Facilities, 2015 CCH Credit Facility, CCH Working Capital Facility, Cheniere Revolving Credit Facility and Cheniere Marketing trade finance facilities. 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.
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(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. |
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