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A Look at Cheniere Energy’s Balance Sheet Ahead of 3Q results

Kurt Gallon - Author
By

Oct. 31 2016, Updated 8:06 a.m. ET

Cheniere Energy’s high leverage

Cheniere Energy’s (LNG) total outstanding debt by the end of the second quarter was $19.5 billion, which was ~$3.0 billion higher than its total debt outstanding in 2015. This includes $13.2 billion of debt from subsidiary Cheniere Energy Partners (CQP).

Cheniere Energy Partners issued $1.5 billion in senior secured notes in September 2016 to repay borrowing under the credit facilities at Sabine Pass. The Sabine Pass LNG (liquefied natural gas) terminal must repay $1.7 billion of debt maturing in November 2016. Cheniere Energy and its subsidiaries have no debt maturities until 2020 following these repayments.

Cheniere Energy’s high leverage, outstanding debt, and negative cash flow have remained a source of major concern for investors for quite some time. Over the long term, Cheniere Energy expects to service its debt with cash flow generated through long-term contracts.

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