Cheniere Energy Unit Closes Senior Secured Notes Offering

U.S. liquefied natural gas exporter Cheniere Energy, Inc.’s (NYSE:LNG) wholly owned affiliate, Cheniere Corpus Christi Holdings, LLC, has closed the offering of $1.25 billion aggregate principal amount of Senior Secured Notes.

Notably, the principal amount of the offering had been increased from the initially announced $1.0 billion to $1.25 billion. The senior secured notes will carry interest at a rate of 7.00% per annum and will mature on Jun 30, 2024.

The proceeds from the aforesaid offering will be used to pay in advance a portion of the principal amounts currently outstanding under the Cheniere Energy unit’s credit facility and to pay fees and expenses incurred in connection with this offering and the prepayment.

The Senior Secured Notes has not been registered under the Securities Act of 1933, and hence cannot be traded in the United States.

Houston, TX-based Cheniere Energy is a leading energy company which engages in the LNG-related businesses in the United States. The company has two business units – LNG Terminal Business and LNG & Natural Gas Marketing Business.

Recently, the company reported adjusted loss of 57 cents per share for the first quarter, wider than the Zacks Consensus Estimate of a loss of 55 cents per share. Also, the company has had a poor earnings history. Cheniere Energy missed the Zacks Consensus Estimate in the last four quarters with a negative average surprise of 61.72%. The deteriorating performance can be attributed to weak operating cash flow and increases in the company’s expenditures and derivative losses.

Cheniere Energy currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, some better-ranked stocks from the same space are EP Energy Corporation (NYSE:EPE) , World Point Terminals, LP (NYSE:WPT) and Bonanza Creek Energy, Inc. (NYSE:BCEI) . While EP Energy and World Point Terminals sports a Zacks Rank #1 (Strong Buy), Bonanza Creek Energy carries a Zacks Rank #2 (Buy).