Cheniere Energy Closes $250M Convertible
August 18, 2008
Houston-based Cheniere Energy said today that it has closed a $250 million senior secured convertible loan agreement with GSO Capital Partners.
The 10-year convertible loan has a 12% annual interest rate, which will accrue for three years and have optional put rights in 2011, 2013 and 2015. The loan facility is secured with the company’s rights and fees payable under management service agreements it has with its owner, Cheniere Energy Partners.
Cheniere, which is developing natural gas pipeline operations on the U.S. Gulf Coast, plans to use the funding to refinance its $95 million bridge loan and for general purposes. As of the end of June, the company had approximately $2.85 billion of total debt outstanding.
Standard & Poor’s affirmed its CCC+ corporate credit rating on the company, citing a vulnerable business profile and highly leveraged financial risk profile. The outlook is negative.
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