In December 2004, the Federal Energy Regulatory Commission approved the construction of the Sabine Pass LNG receiving terminal in Cameron Parish, La. The approval, under Section 3 of the Natural Gas Act, authorizes Sabine Pass LNG to construct and operate a liquefied natural gas receiving terminal. Construction is anticipated to start by the end of first quarter of 2005. The facility is designed to process 2.6 billion cubic feet per day of LNG.
The Credit Facility will be available for draws to pay project costs incurred during construction following Sabine Pass LNG's equity contribution and standard conditions precedent. The Credit Facility's final maturity date will occur no later than ten years from the closing. In connection with the closing of the Credit Facility, Sabine Pass LNG has entered into swap agreements with HSBC Bank USA, National Association and Societe Generale, New York Branch. Under the terms of the swap agreements, Sabine Pass LNG will hedge the LIBOR interest rate component of its drawings under the Credit Facility up to a maximum amount of $700 million. The material terms and conditions of the Credit Facility and the swap agreements will be described in a Current Report on Form 8-K filed with the Securities & Exchange Commission.
HSBC Securities (USA) Inc. is an indirectly-held, wholly-owned subsidiary of HSBC Holdings plc ("HSBC"). HSBC is headquartered in the UK. The HSBC Group serves over 110 million customers worldwide from approximately 10,000 offices in 76 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$1,154 billion at June 30, 2004, HSBC is one of the world's largest banking and financial services organizations. HSBC is marketed worldwide as "The World's Local Bank."
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