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SMBC Leads $1.25B Innovative ESG Finance Transaction for Cheniere Energy

November 19, 2021, 07:14 AM
Filed Under: Energy
Related: ESG, SMBC, SMBC Group

SMBC, a member of SMBC Group, closed the refinancing of a $1.25 billion revolving credit facility for Cheniere Energy, Inc., the largest liquefied natural gas (LNG) provider in the U.S. SMBC acted as the sole ESG Coordinator and a Joint Lead Arranger on the transaction, which is the first loan transaction by a U.S. oil & gas company to include an ESG feature.

SMBC worked with Cheniere to develop an ESG feature that highlights Cheniere’s commitment to address greenhouse gas emissions throughout its value chain. This ESG feature supports Cheniere’s strategy to focus on developing a rigorous, scientifically informed understanding of greenhouse gas emissions associated with extraction, transportation, and liquefaction of natural gas, along with LNG shipping. This enhanced data on greenhouse gas emissions has the potential to support innovation and investment across the industry, with LNG expected to play a key role over the coming decades in energy security and transition across the world.

The ESG feature developed by SMBC and Cheniere highlights Cheniere’s strategy by allowing for reductions in financing costs based on a percentage of the amount invested by Cheniere in certain related programs, with a corresponding potential for increases in financing costs to the extent Cheniere fails to reach certain strategic milestones.

“We are very proud to have partnered with Cheniere on this innovative transaction. This transaction showcased the advantages of our relationship-centered approach to our clients and our ability to support their strategic goals by bringing together experts ranging from sustainable finance to project finance to loan capital markets,” said Aaron Franklin, Head of Sustainable Finance and Advisory at SMBC.

SMBC Group is committed to the sound development of society through its financial services. As a member of the Group, SMBC will continue to engage and act together with clients to contribute to the global transformation into a better society.

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