Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.21.2
Debt
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Debt DEBT
 
As of September 30, 2021 and December 31, 2020, our debt consisted of the following (in millions):
September 30, December 31,
2021 2020
Long-term debt:
SPL — 4.200% to 6.25% senior secured notes due between March 2022 and September 2037 and working capital facility (“2020 SPL Working Capital Facility”) (1)
$ 13,128  $ 13,650 
Cheniere Partners — 3.250% to 5.625% senior notes due between October 2025 and January 2032 and credit facilities (“2019 CQP Credit Facilities”)
4,200  4,100 
Unamortized premium, discount and debt issuance costs, net of accumulated amortization (157) (170)
Total long-term debt, net of premium, discount and debt issuance costs 17,171  17,580 
Current debt:
SPL — current portion of 6.25% senior secured notes due March 2022 (the “2022 SPL Senior Notes”) (1) (2)
522  — 
Cheniere Partners — current portion of 5.625% senior notes due October 2026 (the “2026 CQP Senior Notes”) (3)
428  — 
Unamortized discount and debt issuance costs, net of accumulated amortization (6) — 
Total current debt, net of discount and debt issuance costs 944  — 
Total debt, net of premium, discount and debt issuance costs $ 18,115  $ 17,580 
(1)A portion of the 2022 SPL Senior Notes is categorized as long-term debt because the proceeds from the expected series of sales of approximately $482 million aggregate principal amount of senior secured notes due 2037 pursuant to executed note purchase agreements, expected to be issued in the fourth quarter of 2021, subject to customary closing conditions, will be used to strategically refinance a portion of the 2022 SPL Senior Notes and pay related fees, costs and expenses.
(2)In October 2021, $318 million of the 2022 SPL Senior Notes was redeemed with $100 million of the proceeds from our issuance of the 3.250% senior notes due 2032 (the “2032 CQP Senior Notes”) and $218 million of cash on hand. See Issuances and Redemptions section below for further discussion.
(3)In October 2021, we redeemed the remaining outstanding aggregate principal amount of the 2026 CQP Senior Notes that were not purchased pursuant to the tender offer and consent solicitation in September 2021. See Issuances and Redemptions section below for further discussion.
Issuances and Redemptions

The following table shows the issuances and redemptions of long-term debt during the nine months ended September 30, 2021 (in millions), excluding intra-quarter borrowings and repayments:
Issuances Principal Amount Issued
Three Months Ended March 31, 2021
Cheniere Partners — 4.000% Senior Notes due 2031 (the “2031 CQP Senior Notes”) (1)
$ 1,500 
Three Months Ended September 30, 2021
Cheniere Partners — 2032 CQP Senior Notes (2)
1,200 
Nine Months Ended September 30, 2021 total
 $ 2,700 
Redemptions Principal Amount Redeemed
Three Months Ended March 31, 2021
Cheniere Partners — 5.250% Senior Notes due 2025 (the “2025 CQP Senior Notes”) (1)
$ 1,500 
Three Months Ended September 30, 2021
Cheniere Partners — 2026 CQP Senior Notes (2)
672 
Nine Months Ended September 30, 2021 total
 $ 2,172 
(1)Net proceeds from the issuance of the 2031 CQP Senior Notes, together with cash on hand, were used to redeem all of our outstanding 2025 CQP Senior Notes, resulting in $54 million of loss on extinguishment of debt relating to the payment of early redemption fees and write off of unamortized debt premium and issuance costs.
(2)Net proceeds from the issuance of the 2032 CQP Senior Notes were used to redeem a portion of the 2026 CQP Senior Notes in September 2021 pursuant to the tender offer and consent solicitation, resulting in $27 million of loss on extinguishment of debt relating to the payment of early redemption fees and write off of unamortized debt premium and issuance costs. In October 2021, the remaining net proceeds from the issuance of the 2032 CQP Senior Notes were used to redeem the remaining outstanding principal amount of the 2026 CQP Senior Notes and, together with cash on hand, redeem $318 million of the 2022 SPL Senior Notes.

Credit Facilities

Below is a summary of our credit facilities outstanding as of September 30, 2021 (in millions):
2020 SPL Working Capital Facility (1) 2019 CQP Credit Facilities
Original facility size $ 1,200  $ 1,500 
Less:
Outstanding balance —  — 
Commitments prepaid or terminated —  750 
Letters of credit issued 396  — 
Available commitment $ 804  $ 750 
Priority ranking Senior secured Senior secured
Interest rate on available balance
LIBOR plus 1.125% - 1.750% or base rate plus 0.125% - 0.750%
LIBOR plus 1.25% - 2.125% or base rate plus 0.25% - 1.125%
Weighted average interest rate of outstanding balance n/a n/a
Maturity date March 19, 2025 May 29, 2024
(1)The 2020 SPL Working Capital Facility contains customary conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. SPL pays a commitment fee equal to an annual rate of 0.1% to 0.3% (depending on the then-current rating of SPL), which accrues on the daily amount of the total commitment less the sum of (1) the outstanding principal amount of loans, (2) letters of credit issued and (3) the outstanding principal amount of swing line loans.
Restrictive Debt Covenants

The indentures governing our senior notes and other agreements underlying our debt contain customary terms and events of default and certain covenants that, among other things, may limit us and our restricted subsidiaries’ ability to make certain investments or pay dividends or distributions.

As of September 30, 2021, we and SPL were in compliance with all covenants related to our respective debt agreements.

Interest Expense

Total interest expense, net of capitalized interest consisted of the following (in millions):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Total interest cost $ 244  $ 246  $ 732  $ 759 
Capitalized interest (34) (25) (96) (68)
Total interest expense, net of capitalized interest $ 210  $ 221  $ 636  $ 691 

Fair Value Disclosures

The following table shows the carrying amount and estimated fair value of our debt (in millions):
September 30, 2021 December 31, 2020
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value
Senior notes — Level 2 (1) $ 17,478  $ 19,231  $ 16,950  $ 19,113 
Senior notes — Level 3 (2) 800  997 800  1,036 
Credit facilities — Level 3 (3) —  —  —  — 
(1)The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
(2)The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.
(3)The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.