Venture Global Calcasieu Pass (VGCP), a subsidiary of Venture Global LNG, has closed a US$1.25 billion offering of senior secured notes. The 12-year notes will pay a 3.875% coupon and mature on November 1 2033. The offering was increased from an initial US$750 million on the back of strong demand.
Joint active bookrunners were J. P. Morgan (B&D), BofA Securities and RBC Capital Markets. Joint bookrunners were ICBC, Mizuho, Noruma, SMBC, Goldman Sachs, ING, Morgan Stanley, Natixis, Santander and Scotia.
VGCP is the developer of the Calcasieu Pass liquefaction plant in the US state of Louisiana. It intends to use the net proceeds from the offering to prepay certain amounts outstanding under existing senior secured first-lien credit facilities, and pay breakage and hedge termination costs in connection with these prepayments. The notes are guaranteed by VGCP affiliate TransCameron Pipeline.
The Calcasieu Pass project is located where the Calcasieu Ship Channel meets the Gulf of Mexico, near several major natural gas pipelines. Commercial operations are expected to begin in the fourth quarter of 2022 or first quarter of 2023.
Venture Global LNG is a long-term, low-cost provider of LNG, to be sourced from North American natural gas basins. It is currently constructing or developing 70 metric tonnes per annum (mtpa) of production capacity in Louisiana. On November 4, the company signed long-term supply agreements with China Petroleum & Chemical Corp (Sinopec) and its subsidiary Unipec, in the largest LNG suppy deal between China and the United States.
In September Venture Global signed a long-term agreement with Polish Oil and Gas Company to increase LNG exports to Poland. Cargoes will be supplied from the Calcasieue Pass and Plaquemines LNG export facilities.
In February this year Venture Global signed a US$500 million term loan, partially to fund early construction activity at Plaquemines, and also for general corporate purposes. The loan featured Morgan Stanley and JP Morgan Chase as joint lead arrangers, and Mizuho and Bank of America as lenders. Davis Polk & Wardwell was the borrower's counsel, while Simpson Thacher & Bartlett represented the lenders.