Item 1.01 Entry into a Material Definitive Agreement.
On
Use of Proceeds
The proceeds of the Term Loan Facility, along with cash on the balance sheet,
are expected to be used to (i) repay the existing 11.0% Convertible Senior
Secured Notes due 2025 issued by
Conditions Precedent to Borrowings
Borrowings under the Term Loan Facility are subject to customary conditions precedent, including the absence of defaults, the accuracy of certain representations and warranties, the perfection of security interests, and the payment of applicable fees and expenses. Furthermore, borrowings that are used to repay obligations under the EIG NPA will require that CEI have sufficient funds available (in the form of cash, cash equivalents, available and undrawn commitments under the Revolving Credit Facility and/or commitments under the Term Loan Facility) to prepay in full all outstanding indebtedness under the EIG NPA.
Covenants and Events of Default
The Term Loan Facility contains a financial covenant requiring CEI to ensure
that its leverage ratio does not exceed 5.75:1.00 at any time that
(x) outstanding loans under the Term Loan Facility and Revolving Credit Facility
(including unreimbursed letter of credit drawings) exceed (y) 30% of the
aggregate amount of outstanding loans under the Term Loan Facility plus
remaining undrawn commitments thereunder and commitments under the Revolving
Credit Facility. In addition, beginning with the first full fiscal quarter ended
after the later of
The Term Loan Facility includes representations, warranties, affirmative and negative covenants and events of default that are customary for companies like CEI with lenders of the type participating in the Term Loan Facility and consistent with the equivalent provisions contained in the Revolving Credit Facility.
Interest and Fees
Loans under the Term Loan Facility will bear interest at a variable rate per
annum equal to LIBOR or the base rate plus the applicable margin. The applicable
margin for (i) LIBOR loans ranges from (x) 2.00% to 2.75% per annum from the
Closing Date until the first anniversary thereof, (y) 2.50% to 3.25% per annum
from the first anniversary of the Closing Date until the second anniversary of
the Closing Date and (z) 3.00 to 3.75% per annum from the second anniversary of
the Closing Date until
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annum from the Closing Date until the first anniversary thereof, (y) 1.50% to
2.25% per annum from the first anniversary of the Closing Date until the second
anniversary of the Closing Date and (z) 2.00 to 2.75% per annum from the second
anniversary of the Closing Date until
CEI will pay a commitment fee on the average daily amount of undrawn commitments at a rate equal to 30% multiplied by the applicable margin for LIBOR loans then in effect. CEI will also pay duration fees (i) on, and subject to the occurrence of, the first anniversary of the Closing Date, in an amount equal to 0.25% multiplied by the aggregate amount of commitments as of the earlier to occur of (x) the date that loans are first borrowed under the Term Loan Facility (prior to giving effect to any loans made on such date) and (y) 45 days following the Closing Date (the "Payment Date") and (ii) on, and subject to the occurrence of, the second anniversary of the Closing Date, in an amount equal to 0.50% multiplied by the aggregate amount of commitments as of the Payment Date.
In connection with the Term Loan Facility, CEI is paying fees to the Lenders, as well as additional transaction fees and expenses. Annual administrative fees must also be paid to the administrative agent for the Term Loan Facility.
Repayments
The Term Loan Facility matures on
Collateral
The Term Loan Facility is secured by a first priority security interest (subject
to permitted liens and other customary exceptions) on a pari passu basis with
the Revolving Credit Facility in substantially all of the assets of CEI,
including the equity interests in CEI's direct subsidiaries (other than certain
excluded subsidiaries). Upon repayment in full of the outstanding obligations
under the EIG NPA, the equity interests in
The foregoing description of the Term Loan Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Term Loan Facility, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
d) Exhibits Exhibit Number Description 10.1 Credit Agreement, dated as ofJune 18, 2020 , amongCheniere Energy, Inc. , the Lenders party thereto, Société Générale, as Administrative Agent, and the other agents and arrangers party thereto from time to time. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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