Press Release

White & Case Represented FLNG Liquefaction 2, LLC in Successful Issuance of Investment Grade Project Bonds

Global law firm White & Case LLP represented FLNG Liquefaction 2, LLC (FLIQ2), a subsidiary of Freeport LNG and IFM Investors, in the private placement of US$1.25 billion of investment grade project bonds.

The proceeds of the issuance were used to refinance a portion of the US$4.025 billion senior secured loans incurred by FLIQ2 to initially finance the development and construction of the second liquefaction train of the multi-train natural gas liquefaction and LNG export facility being constructed at Quintana Island near Freeport, Texas.  The 4.125% Senior Secured Notes due 2038 were rated BBB by both S&P and Fitch.

"The successful issuance of these project bonds reopens the investment grade market for project bonds in the oil & gas sector," said lead partner, Jason Webber who co-heads White & Case's Oil & Gas industry group. "It is also a major milestone for the overall Freeport LNG project and validates Freeport LNG's focus on high quality customers, experienced contractors, and conservative leverage," he continued.

"The completion of FLIQ2's inaugural capital markets transaction was a tremendous undertaking by all parties involved and demonstrates the unique capabilities of the White & Case project bond team," added partner Sean Johnson, who leads the Firm's project bond practice.

White & Case previously represented Freeport LNG in approximately US$15.5 billion of equity, mezzanine debt, and senior secured debt financings for the three liquefaction trains of the Freeport Facility currently under construction. Each of the liquefaction trains has entered into separate offtake arrangements and has been separately financed. BP Energy is the offtaker for the second liquefaction train. The initial senior secured debt financing of the second liquefaction train consists of a seven-year mini-perm construction facility from a wide syndicate of commercial lenders. The debt arrangements of FLIQ2 were structured from the beginning to enable subsequent partial refinancings in the capital markets through highly bespoke common collateral and intercreditor arrangements. The present issuance is the first such refinancing.

The core White & Case team advising on the transaction included Jason Webber, Sean Johnson, Mårten Olsson, Hamad Al-Hoshan, Diana Schawlowski, and Jesany Michel. The broader White & Case team also included Ray Simon, Sylvia Chin, John Donovan, David Thatch, Richard Burke, Ian Cuillerier, Jane Rueger, Richard Graham, Erin Choo, Isaac Tendler, Shea Thompson and Robin Heszkel.

The lead bookrunners were Credit Suisse, Goldman, Sachs & Co., HSBC and RBC Capital Markets, joined by Credit Agricole Securities, Lloyds Securities, Standard Chartered Bank, Mizuho Securities, MUFG, ING, Scotiabank, SMBC Nikko, Societe Generale, BBVA, Deutsche Bank Securities, Natixis, RBS, Barclays, BMO Capital Markets, CIBC Capital Markets, ICBC and Santander.

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