Quarterly report pursuant to Section 13 or 15(d)

Debt (Tables)

v3.10.0.1
Debt (Tables)
9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Debt Instruments
As of September 30, 2018 and December 31, 2017, our debt consisted of the following (in millions): 
 
 
September 30,
 
December 31,
 
 
2018
 
2017
Long-term debt:
 
 
 
 
SPL
 
 
 


5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”)
 
$
2,000

 
$
2,000

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

 
1,000

5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”)
 
1,500

 
1,500

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

 
2,000

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

 
2,000

5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
 
1,500

 
1,500

5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”)
 
1,500

 
1,500

4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”)
 
1,350

 
1,350

5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”)
 
800

 
800

Cheniere Partners
 
 
 
 
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”)
 
1,500

 
1,500

5.625% Senior Notes due 2026 (“2026 CQP Senior Notes”)
 
1,100

 

CQP Credit Facilities
 

 
1,090

CCH
 
 
 
 
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
 
1,250

 
1,250

5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”)
 
1,500

 
1,500

5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”)
 
1,500

 
1,500

CCH Credit Facility
 
4,492

 
2,485

CCH HoldCo II
 
 
 
 
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
 
1,416

 
1,305

Cheniere
 
 
 
 
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”)
 
1,189

 
1,161

4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”)
 
625

 
625

$750 million Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
 

 

Unamortized premium, discount and debt issuance costs, net
 
(784
)
 
(730
)
Total long-term debt, net
 
27,438

 
25,336

 
 
 
 
 
Current debt:
 
 
 
 
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
 

 

$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
 

 

Cheniere Marketing trade finance facilities
 
66

 

Total current debt
 
66

 

 
 
 
 
 
Total debt, net
 
$
27,504

 
$
25,336



Schedule of Line of Credit Facilities
Below is a summary of our credit facilities outstanding as of September 30, 2018 (in millions):
 
 
SPL Working Capital Facility
 
CQP Credit Facilities
 
CCH Credit Facility
 
CCH Working Capital Facility
 
Cheniere Revolving Credit Facility
Original facility size
 
$
1,200

 
$
2,800

 
$
8,404

 
$
350

 
$
750

Incremental commitments
 

 

 
1,566

 
850

 

Less:
 
 
 
 
 
 
 
 
 
 
Outstanding balance
 

 

 
4,492

 

 

Commitments prepaid or terminated
 

 
2,685

 
3,832

 

 

Letters of credit issued
 
494

 

 

 
316

 

Available commitment

$
706


$
115


$
1,646


$
884


$
750

 
 
 
 
 
 
 
 
 
 
 
Interest rate
 
LIBOR plus 1.75% or base rate plus 0.75%
 
LIBOR plus 2.25% or base rate plus 1.25% (1)
 
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 3.25% or base rate plus 2.25%
Maturity date
 
December 31, 2020, with various terms for underlying loans
 
February 25, 2020
 
June 30, 2024
 
June 29, 2023
 
March 2, 2021
 
(1)
There is a 0.50% step-up for both LIBOR and base rate loans beginning on February 25, 2019.

Schedule of Convertible Debt
Below is a summary of our convertible notes outstanding as of September 30, 2018 (in millions):
 
 
2021 Cheniere Convertible Unsecured Notes
 
2025 CCH HoldCo II Convertible Senior Notes
 
2045 Cheniere Convertible Senior Notes
Aggregate original principal
 
$
1,000

 
$
1,000

 
$
625

Debt component, net of discount and debt issuance costs
 
$
1,090

 
$
1,390

 
$
310

Equity component
 
$
207

 
$

 
$
194

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

 
May 13, 2025

 
March 15, 2045

Contractual interest rate
 
4.875
%
 
11.0
%
 
4.25
%
Effective interest rate (8)
 
8.4
%
 
11.9
%
 
9.4
%
Remaining debt discount and debt issuance costs amortization period (9)
 
2.7 years

 
2.0 years

 
26.5 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)
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.
(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.
Schedule of Interest Expense
Total interest expense, including interest expense related to our convertible notes, consisted of the following (in millions):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Interest cost on convertible notes:
 
 
 
 
 
 
 
 
Interest per contractual rate
 
$
60

 
$
55

 
$
176

 
$
162

Amortization of debt discount
 
9

 
8

 
25

 
22

Amortization of debt issuance costs
 
3

 
2

 
7

 
5

Total interest cost related to convertible notes
 
72


65

 
208

 
189

Interest cost on debt excluding convertible notes
 
354


324

 
1,034


931

Total interest cost
 
426

 
389

 
1,242

 
1,120

Capitalized interest
 
(205
)
 
(203
)
 
(589
)
 
(581
)
Total interest expense, net
 
$
221


$
186

 
$
653

 
$
539

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
The following table shows the carrying amount, which is net of unamortized premium, discount and debt issuance costs, and estimated fair value of our debt (in millions):
 
 
September 30, 2018
 
December 31, 2017
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
Senior notes (1)
 
$
19,457

 
$
20,552

 
$
18,350

 
$
20,075

2037 SPL Senior Notes (2)
 
791

 
831

 
790

 
871

Credit facilities (3)
 
4,466

 
4,466

 
3,574

 
3,574

2021 Cheniere Convertible Unsecured Notes (2)
 
1,090

 
1,267

 
1,040

 
1,136

2025 CCH HoldCo II Convertible Senior Notes (2)
 
1,390

 
1,597

 
1,273

 
1,535

2045 Cheniere Convertible Senior Notes (4)
 
310

 
497

 
309

 
447

 
(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, 2026 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.
(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)
Includes SPL Working Capital Facility, CQP Credit Facilities, 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. 
(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.