The future of Tellurian's US natural gas export project is in limbo after the company withdrew a $1 billion high yield bond sale. The stock price fell.
The company halted the offering of senior secured notes and warrants due to uncertainty in the junk bond market. Tellurian sweetened the deal to include a high all-in yield and friendlier terms for investors.
The financing for Tellurian's Lake Charles, Louisiana, liquefied gas complex has been difficult to find. The first phase of the project, known as Driftwood, is estimated to cost around $13 billion.
Concerns that the Federal Reserve will keep hiking rates has led to a risk-off move among investors. The $4 billion bond offering for the takeover of Citrix Systems came with a bigger discount on Monday due to rising yields and widening spreads.
Tellurian and B. Riley Securities didn't respond to questions about the deal. At the opening of regular equity trading on Tuesday, the stock plunged as much as 17% and was down 16% at 9:35 a.m.
Charif Souki has been pitching the project for a long time.
Achur Iskounen, an investor, said poor corporate governance and a lack of relevant experience made the project unsustainable. Iskounen wanted the company to be sold.
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