Item 1.01
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Entry into a Material Definitive Agreement.
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On October 28, 2021 (the “Closing Date”), Cheniere Energy, Inc. (“CEI”), entered into a $1.25 billion Second Amended and Restated Revolving Credit Agreement among CEI, as borrower, various lenders (the “Lenders”) and issuing banks, the joint lead arrangers party thereto, Sumitomo Mitsui Banking Corporation, as ESG Coordinator, and Société Générale, as administrative agent for the Lenders (the “Revolving Credit Facility”). The Revolving Credit Facility amends and restates CEI’s existing revolving credit facility, dated as of December 13, 2018, to, among other things, (i) extend the maturity date thereunder, (ii) reduce the rate of interest and commitment fees applicable thereunder, and (iii) make certain other changes to the terms and conditions of the existing revolving credit facility. The Lenders and their affiliates have provided and may provide, from time to time in the future, certain financial services to CEI and its affiliates, for which they may receive advisory or transaction fees, as applicable, of the nature and in amounts customary in the industry for these financial services.
Availability
100% of the Revolving Credit Facility will be available to provide loans to CEI to be used for general corporate purposes of CEI and its subsidiaries. 100% of the aggregate amount of commitments under the Revolving Credit Facility are available for the issuance of letters of credit for the account or benefit of CEI and its subsidiaries that backstop equity contribution, equity support and other similar undertakings to support certain material capital projects of CEI and its subsidiaries. Up to $250 million of commitments under the Revolving Credit Facility are available for the issuance of letters of credit for the account or benefit of CEI and its subsidiaries for general corporate purposes.
Conditions Precedent to Extensions of Credit
Advances and issuances of letters of credit under the Revolving Credit Facility are subject to customary conditions precedent, including the absence of defaults and the accuracy of certain representations and warranties.
Covenants and Events of Default
The Revolving Credit Facility contains a financial covenant requiring CEI to maintain a non-consolidated leverage ratio not to exceed 5.50:1.00 as of the end of any fiscal quarter if (i) as of the last day of such fiscal quarter the aggregate principal amount of outstanding loans plus drawn and unreimbursed letters of credit is greater than 35% of the aggregate commitments under the Revolving Credit Facility (a “Covenant Trigger Event”) or (ii) a Covenant Trigger Event had occurred and been continuing as of the last day of the immediately preceding fiscal quarter and as of the last day of such ending fiscal quarter such Covenant Trigger Event had not ceased for a period of at least thirty consecutive days.
The Revolving Credit Facility includes representations, warranties and affirmative and negative covenants customary for companies like CEI with lenders of the type participating in the Revolving Credit Facility, including, among others, covenants relating to compliance with laws, conditions to the making of restricted payments, including dividends, and limitations on indebtedness, guarantees, hedging, liens, investments and affiliate transactions. These covenants are subject to certain materiality qualifiers, reasonableness standards, thresholds, grace periods and exceptions.
In addition, the Revolving Credit Facility also includes customary events of default (including non-payment, cross default to other indebtedness of CEI in excess of $250 million, cross acceleration to indebtedness of certain subsidiaries of CEI in excess of $250 million, breach of representations, warranties and covenants, unsatisfied judgments in excess of $250 million, voluntary and involuntary bankruptcy events and change of control of CEI), which are subject to customary grace periods and materiality standards.