Global law firm White & Case LLP represented Freeport LNG Expansion, L.P. (Freeport LNG) and its subsidiaries FLNG Liquefaction 3, LLC (FLIQ3) and FLIQ3 Super Holdco, LLC (FLIQ3 Super Holdco) in the successful close and funding of the third train of the Freeport LNG multi-train natural gas liquefaction and export facility being constructed at Freeport LNG’s existing LNG regasification facility at Quintana Island near Freeport, Texas. Total anticipated project costs for train 3, including financing costs, exceed US$4.2 billion.
Approximately US$3.64 billion of non-recourse senior secured debt for the project was provided to FLIQ3 by a syndicate of 27 commercial banks. The senior secured debt was structured as a seven-year mini-perm construction facility with an anticipated takeout in the capital markets. In addition to the construction debt, the senior secured facilities include an integrated working capital facility and previously executed deal contingent hedges which locked in interest rates for Freeport LNG well in advance of closing.
The remaining US$ 0.925 billion of train 3 project costs was funded through a mezzanine note issuance by FLIQ3's indirect parent FLIQ3 Super Holdco. The full amount of the mezzanine notes was funded on the closing date and applied to or reserved for application to project costs. No further cash equity commitments were required of Freeport LNG, who previously contributed to FLIQ3 a portion of its interest in the existing LNG import and regasification facility. Freeport LNG retains 100% of the equity interest in train 3.
The closing of the mezzanine and senior secured financings of the third liquefaction train completes the initial phase of the Freeport LNG facility, following on the heels of the November 2014 closing of over $9.6 billion of equity and debt commitments in respect of the first two liquefaction trains. The aggregate committed and funded cash equity, mezzanine debt, and senior secured debt for the first three liquefaction trains of the Freeport LNG facility now exceeds US$14 billion. Further information on the equity and debt financing of the initial two liquefaction trains may be found here.
"We are extraordinarily pleased to have completed the financing of train 3" said lead partner Jason Webber. "These two financings cap three incredibly rewarding years working with Freeport LNG and Macquarie Capital to enable the first phase of this important project" he continued. "We are especially proud of the creativity and hard work that went into structuring the mezzanine debt financing to complete the financing of train 3 without further cash equity contributions from Freeport LNG" added partner Clark Wohlferd. Macquarie Capital is financial advisor to Freeport LNG.
The core White & Case team advising on the Freeport LNG transactions included Jason Webber, Clark Wohlferd, Frank Schoen, Melinda Baglio, Alec Johnson, Hamad Al-Hoshan, Elijah Gjeltema, Cristian Blumm, Julia Bell, and Rohit Pothukuchi. The broader White & Case team also included Sylvia Chin, David Thatch, John Lillis, Daniel Hagan, Jane Rueger, Marten Olsson, Issac Tendler, Jason Goldstein, and Rick Graham.
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