Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.22.2.2
Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt DEBT
Debt consisted of the following (in millions): 
September 30, December 31,
2022 2021
SPL:
Senior Secured Notes:
5.625% due 2023 (the “2023 SPL Senior Notes”) (1)
 $ 1,500  $ 1,500 
5.75% due 2024
 2,000  2,000 
5.625% due 2025
 2,000  2,000 
5.875% due 2026
 1,500  1,500 
5.00% due 2027
 1,500  1,500 
4.200% due 2028
 1,350  1,350 
4.500% due 2030
 2,000  2,000 
4.27% weighted average rate due 2037
 1,282  1,282 
Total SPL Senior Secured Notes 13,132  13,132 
Working capital revolving credit and letter of credit reimbursement agreement (the “SPL Working Capital Facility”)
 —  — 
Total debt - SPL 13,132  13,132 
CQP:
Senior Notes:
4.500% due 2029
 1,500  1,500 
4.000% due 2031
 1,500  1,500 
3.25% due 2032
 1,200  1,200 
Total CQP Senior Notes 4,200  4,200 
Credit facilities (the “CQP Credit Facilities”) —  — 
Total debt - CQP 4,200  4,200 
CCH:
Senior Secured Notes:
7.000% due 2024
 1,250  1,250 
5.875% due 2025
 1,500  1,500 
5.125% due 2027 (2)
 1,500  1,500 
3.700% due 2029 (2)
 1,492  1,500 
3.72% weighted average rate due 2039 (2)
 2,699  2,721 
Total CCH Senior Secured Notes 8,441  8,471 
CCH Credit Facility —  1,728 
Working capital facility (the “CCH Working Capital Facility”) (3)
 —  250 
Total debt - CCH 8,441  10,449 
Cheniere:
4.625% Senior Secured Notes due 2028
 1,500  2,000 
2045 Cheniere Convertible Senior Notes (4)
 —  625 
Revolving credit facility (the “Cheniere Revolving Credit Facility”)
 —  — 
Total debt - Cheniere 1,500  2,625 
Cheniere Marketing: trade finance facilities and letter of credit facility (3)
—  — 
Total debt 27,273  30,406 
Current portion of long-term debt (219) (117)
Short-term debt (1,498) (250)
Unamortized premium, discount and debt issuance costs, net (231) (590)
Total long-term debt, net of premium, discount and debt issuance costs $ 25,325  $ 29,449 
(1)In October 2022, $300 million of the 2023 SPL Senior Notes were redeemed. As of September 30, 2022, the entire amount of the 2023 SPL Senior Notes was classified as short-term debt.
(2)Subsequent to September 30, 2022 and through October 31, 2022, we executed bond repurchases totaling $221 million, inclusive of CCH’s Senior Secured Notes due 2027, 2029 and 2039 on the open market, which are classified as current portion of long-term debt as of September 30, 2022 net of discount and debt issuance costs of $2 million.
(3)These debt instruments are classified as short-term debt.
(4)The redemption of these notes was financed with borrowings under the Cheniere Revolving Credit Facility, which is a long-term debt instrument. Therefore, the 2045 Cheniere Convertible Senior Notes were classified as long-term debt as of December 31, 2021. See Convertible Notes section below for further discussion of the redemption.
Credit Facilities

Below is a summary of our committed credit facilities outstanding as of September 30, 2022 (in millions):
SPL Working Capital Facility
CQP Credit Facilities
CCH Credit Facility (1)
CCH Working Capital Facility (1)
Cheniere Revolving Credit Facility
Total facility size $ 1,200  $ 750  $ 3,260  $ 1,500  $ 1,250 
Less:
Outstanding balance —  —  —  —  — 
Letters of credit issued 363  —  —  218  — 
Available commitment $ 837  $ 750  $ 3,260  $ 1,282  $ 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%
SOFR plus credit spread adjustment of 0.1% , plus margin of 1.5% or base rate plus 0.5%
SOFR plus credit spread adjustment of 0.1%, plus margin of 1.0% - 1.5% or base rate plus applicable margin
LIBOR plus 1.250% - 2.375% or base rate plus 0.250% - 1.375% (2)
Commitment fees on undrawn balance 0.15% 0.49% 0.53% 0.18% 0.25%
Maturity date March 19, 2025 May 29, 2024 (3) June 15, 2027 October 28, 2026
(1)In June 2022, CCH amended and restated the CCH Credit Facility and the CCH Working Capital Facility resulting in $20 million of debt extinguishment and modification costs to, among other things, (1) provide incremental commitments of $3.7 billion and $300 million for the CCH Credit Facility and the CCH Working Capital Facility, respectively, in connection with the FID with respect to the Corpus Christi Stage 3 Project, (2) extend the maturity, (3) update the indexed interest rate to SOFR and (4) make certain other changes to the terms and conditions of each existing facility.
(2)This facility was amended in 2021 to establish a SOFR-indexed replacement rate for LIBOR.
(3)The CCH Credit Facility matures the earlier of June 15, 2029 or two years after the substantial completion of the last Train of the Corpus Christi Stage 3 Project.

Convertible Notes

On December 6, 2021, we issued a notice of redemption for all $625 million aggregate principal amount outstanding of the 2045 Cheniere Convertible Senior Notes. The notice of redemption allowed holders to elect to convert their notes at any time prior to a specified deadline on December 31, 2021, with settlement of such converted notes in cash, as elected by us, on January 5, 2022. The impact of holders electing conversion was immaterial to the Consolidated Financial Statements. The 2045 Cheniere Convertible Senior Notes not converted were redeemed on January 5, 2022 with borrowings under the Cheniere Revolving Credit Facility. We recognized $16 million of debt extinguishment costs related to the early redemption of these convertible notes.

Restrictive Debt Covenants

The indentures governing our senior notes and other agreements underlying our debt contain customary terms and events of default and certain covenants that, among other things, may limit us, our subsidiaries’ and its restricted subsidiaries’ ability to make certain investments or pay dividends or distributions. SPL, CQP and CCH are restricted from making distributions under agreements governing their respective indebtedness generally until, among other requirements, deposits are made into any required debt service reserve accounts and a historical debt service coverage ratio and projected debt service coverage ratio of at least 1.25:1.00 is satisfied.

As of September 30, 2022, each of our issuers was in compliance with all covenants related to their respective debt agreements.
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,
2022 2021 2022 2021
Interest cost on convertible notes:
Interest per contractual rate $ —  $ 6  $ —  $ 29 
Amortization of debt discount and debt issuance costs —  1  —  9 
Total interest cost related to convertible notes —  7  —  38 
Interest cost on debt and finance leases excluding convertible notes 376  391  1,118  1,178 
Total interest cost 376  398  1,118  1,216 
Capitalized interest (22) (34) (58) (128)
Total interest expense, net of capitalized interest $ 354  $ 364  $ 1,060  $ 1,088 

Fair Value Disclosures

The following table shows the carrying amount and estimated fair value of our debt (in millions):
  September 30, 2022 December 31, 2021
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value
Senior notes — Level 2 (1)
$ 24,020  $ 22,461  $ 24,550  $ 26,725 
Senior notes — Level 3 (2)
3,253  2,916  3,253  3,693 
2045 Cheniere Convertible Senior Notes — Level 1 (3) —  —  625  526 
(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 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.

The estimated fair value of our credit facilities approximates the principal amount outstanding 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.