Dominion Takes Out $3B Loan for Cove Point Facility

This another one of those high finance thangs we don’t fully understand. Dominion Energy spent $4 billion to build their Cove Point LNG export facility in Lusby, Maryland. Somehow and somewhere they got money to build it–investors perhaps, or maybe Dominion had some cash tucked away under the corporate mattress. Dominion wants to get some of that debt off its books, so it has just structured a three-year loan with 20 lenders for $3 billion, reducing the company’s “parent level debt”–as opposed to child or subsidiary level debt. What it all means, if we’re understanding it correctly, is that Dominion is moving debt from the parent company’s balance sheet to the Cove Point subsidiary company’s balance sheet. Prior to this, Cove Point “owed” the money to Dominion itself (all in the family), and now, instead, the Cove Point subsidiary will owe that money to lenders directly. That’s our take. Hopefully it won’t take long for Cove Point to pay off the debt…

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