US – Freeport LNG selling notes for refi

By Alison Healey

A unit of Freeport LNG is selling more than US£1bn in 5.7% senior secured notes to refinance bank facilities on the project's Train 3 in Texas. The FLIQ3 notes will mature in March 2040 and will refinance the company's operating bank facility that matures in June 2027.

Fitch assigned a BBB- rating with stable outlook to the notes and affirmed the BBB- rating on the project's outstanding notes. The Fitch ratings case projects an average debt service coverage ratio of 1.52x which is in line with a higher rating but it is constrained by the credit quality of "key counter parties with high revenue dependency", Fitch said. "A limited margin of safety remains on the credit quality of one of the project's key revenue counterparties", the ratings agency noted, and further deterioration in the counterparty's credit quality could lead to negative rating action.

The project operates under long-term liquefaction tolling arrangements with two offtakers.

One LTA originally signed with a subsidiary of Toshiba is backed by a guarantee from a subsidiary of Total. The second LTA with SK E&S LNG is backed by a parent guarantee from SK Holdings.

FLIQ3's revenue for the 12 months prior to September 2025 was US£1.1bn, exceeding Fitch's base and rating case projections by around 34%. Higher-than-expected production, merchant cargo netbacks, and prepayment receipts from Trafigura drove this performance, Fitch said.

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