LNG‐Hungry Lenders Stump Up $17.8 Billion For US Projects

Banks provided a total of $17.8 billion to three mega deals in the second quarter of this year, underscoring a continued strong appetite for US liquefaction projects. Freeport LNG train 3, and two Cheniere projects – Corpus Christi LNG trains 1 and 2 and Sabine Pass Liquefaction (SPL) train 5 – all saw low pricing and oversubscription in their recently closed project financings. The three deals have already surpassed the $15.7 billion worth of funding finalized last year for Louisiana’s three‐train Cameron LNG project and trains 1 and 2 for the Freeport LNG project in Texas. And more debt could be raised in the second half of 2015. US LNG projects could ultimately attract a total of over $20 billion in bank funding this year if Cheniere also manages to reach financial close on its Corpus Christi train 3 and SPL Train 6 deals. Freeport LNG secured $3.6 billion from over 25 lenders at thin margins of 175‐200 basis points (bps) over the London interbank offered rate (Libor) for Train 3 and undercut the pricing it received for its Train 2 financing last year (see table and chart). Right at the end of the second quarter, Cheniere wrapped up $5.8 billion of funding for SPL’s Train 5 at 175 bps, which was much lower than the 300‐325 bps it saw on SPL Trains 3 and 4 in 2013 and 350‐375 bps on Trains 1 and 2 in 2012 (see table). Click here to read full article