Moody's upgrades Cheniere Energy rating to Baa2 with a stable outlook

Investing.com – Moody’s on Thursday upgraded the senior unsecured notes rating of Cheniere Energy, Inc. from Baa3 to Baa2. All rating outlooks remain stable.

The rating agency also confirmed the Baa2 rating for Cheniere Energy Partners, L.P.'s senior unsecured notes, maintaining a stable outlook.

Moody’s Senior Vice President Elena Nadtotchi stated that the upgrade reflects the company’s strong operational performance, solid balance sheet, and effective execution of growth projects, including the expansion of Corpus Christi liquefied natural gas production capacity.

The Baa2 rating reflects Cheniere Energy’s robust operational performance, prudent financial policies, effective risk management, and conservative financing of highly contracted, modular growth projects. The company has established a balanced capital allocation framework, prioritizing reinvestment of operating cash flow into capacity expansion and dividend payments. Remaining free cash flow is used for debt reduction and share repurchases, while maintaining strong liquidity.

The completion of the large-scale expansion project at Cheniere Corpus Christi Holdings, LLC is expected to boost earnings and cash flow in 2026. The company maintains a prudent leverage level, with debt/EBITDA on a proportionate basis trending below 4x. The upgrade also reflects the recent rating increase of Cheniere Corpus Christi Holdings from Baa2 to Baa1.

Cheniere Energy’s debt structure is composed of a significant amount of project-level secured debt and unsecured intermediate holding company debt. The company is expected to simplify its financing structure over time, reducing structural subordination through increased capital at the parent level and refinancing needs.

As of the end of 2025, Cheniere Energy reported $1.1 billion in consolidated unrestricted cash and has a fully undrawn $1.25 billion revolving credit facility due in August 2030. The facility has no financial maintenance covenants. The company’s strong operating cash flow, supported by subsidiary distributions, is sufficient to cover debt service and dividends. The notes are due in 2028 and 2034.

Cheniere Energy Partners is a master limited partnership, approximately 51% owned by Cheniere Energy and 49% by Blackstone Group, Brookfield Asset Management, and public unitholders.

The partnership’s Baa2 rating reflects its strong credit profile, supported by cash flows and distributions from three operating subsidiaries: Sabine Pass Liquefaction, LLC, Sabine Pass LNG, L.P., and Cheniere Creole Trail Pipeline, L.P. The rating is offset by the structural subordination of Sabine Pass Liquefaction debt and significant distribution requirements. The group is working to reduce structural subordination by refinancing maturing debt at the partnership level.

Cheniere Energy Partners is expected to keep its leverage ratio below 4x debt/EBITDA. As of the end of 2025, the partnership had $182 million in cash on its balance sheet and a fully undrawn $1 billion revolving credit facility due in June 2028. The notes are due in 2029, 2031, 2032, 2033, 2034, and 2035.

The stable outlook for Cheniere Energy’s rating reflects expectations that the company will maintain its strong leverage levels while completing the growth projects at Cheniere Corpus Christi Holdings.

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