Tellurian Inc Prices New Baby Bond

Tellurian Inc (TELL) has priced the previously announced $25 baby bond.

The issue prices with a coupon of 8.25% for 2 million shares (bonds) with another 300,000 shares available for over allotments.

The issue will have a maturity date of 8/31/2028. The optional early redemption period begins 8/31/2023.

Contrary to what I posted yesterday the issue is rated–by Egan Jones–at BBB+

Interest payments are made on the last day of January, April, July and October starting on 10/31/2021.

This issue will trade under ticker TELLL on Nasdaq

The pricing term sheet can be read here.

11 thoughts on “Tellurian Inc Prices New Baby Bond”

  1. Just notified this TELLL baby bond was “cancelled.” How can they cancel a security which is already trading?

    Any news?

      1. Confirmed – deal canceled. heard from one of the underwriters. Some problems with the company getting the notes listed to trade in a timely fashion as was promised in the prospectus.

        1. Might have something to do with the Hurricane. I just tried calling their offices and no answer.

    1. These are the key table with supporting paragraphs.

      https://rbnenergy.com/sites/default/files/styles/extra_large/public/field/image/Fig2_Pre-FID%20Liquefaction%20Capacity%20Sales.PNG?itok=AjESGaLx

      The majority of those sales — 9 MMtpa (~1.2 Bcf/d) — came from one project: Tellurian’s Driftwood LNG. Driftwood LNG was originally proposed as a facility with five plants and four “mini” trains each for a total capacity of 27.6 MMtpa (~3.7 Bcf/d) in Louisiana. Back then, Tellurian’s plans included taking on equity investors for 60% of the terminal’s capacity and marketing 40% of the capacity on its own or through traditional long-term sales and purchase agreements (SPAs). However, only one such agreement — with TotalEnergies for 1.5 MMtpa marketed by Tellurian and an additional equity stake equivalent to 1 MMtpa — was ever signed, and that deal expired in June. Since then, however, Tellurian has abandoned the equity stake model and focused on sales around a two-train, 11-MMtpa phase 1 of the project. It’ll defer additional plants for down the line, if there is more appetite and assuming it is able to get the first two liquefaction trains to FID, which is looking increasingly more likely given the 9 MMtpa of sales that have transpired in just the past few months.

      Although the TotalEnergies deal expired, Tellurian has closed three 3-MMtpa (0.4 Bcf/d) SPAs this summer, one each with Gunvor, Vitol and Shell. These deals all have similar terms and are all 10-year SPAs at a price indexed to a blend of JKM and TTF. Tellurian’s successful commercial strategy pivot set the project up for a remarkable comeback, after it experienced a number of setbacks last year. With more than 80% of the planned capacity now secured, that’s enough for the project to achieve FID. That said, the project still needs to secure financing, which may prove more difficult because of its shorter-term SPAs, rather than the 20-year contracts that were used to underpin the first wave of LNG projects. The company has said it hoped to secure financing this year and take FID in the first quarter of 2022. Tellurian reiterated its plan to produce all of the feedgas supply for the terminal, which is essential to the value proposition of Driftwood LNG and these latest sales. The company has said it would not officially take FID on the project until it had secured the necessary upstream reserves. Although Tellurian has increased its Haynesville acreage position and drilling program, it still needs about 1.5 Bcf/d more to achieve that goal. With its excellent forward momentum, Driftwood looks extremely likely to go ahead next year.

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