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Dominion secures $3B commitments for Cove Point term loan

Dominion Energy Inc. on Sept. 4 said it secured commitments for the $3 billion non-amortizing Cove Point term loan from more than 20 lenders.

Initial drawn pricing for the three-year term loan is set at the London Interbank Offered Rate plus 1.375%. The proceeds from the financing will be used to repay outstanding debt the parent company level. The transaction will reduce parent level debt as a percentage of total company debt by approximately 8%, Dominion said in a news release.

The company said it will close and fund the facility during this month.

In its most recent Form 10-Q, Dominion Energy indicated that it was planning to pursue debt financing of the Cove Point LNG facility in the third quarter, as well as divestiture of certain assets, potentially including its interest in Blue Racer Midstream LLC, accounted for as an equity method investment.

Dominion Energy owns the Cove Point LNG terminal, which entered commercial service in 2018. The terminal is located on the Chesapeake Bay in Lusby, Md., and has a storage capacity of 14.6 Bcf and a daily send-out capacity of 1.8 Bcf. The terminal connects, via its own pipeline, to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipe Line Co. LLC, Columbia Gas Transmission LLC and Dominion Energy Transmission Inc.