Single B price for Double B risk because of arbitration overhang

Research evidence excerpt

Single B price for Double B risk because of arbitration overhang

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Venture Global, Inc. (subsidiary issuer)

Single B price for Double B risk because of

arbitration overhang

Initial Opinion - Credit

Initiate OW. Compensated for arbitration risk 22 July 2026

We initiate on Calcasieu Pass Funding (CPF) with an Overweight rating on the S+325 High Yield Credit

term loan as we believe investors are being paid to underwrite arbitration uncertainty. United States

The CPF term loan is rated Ba3/BB, but at 100.5 and 316bps STW it trades in-line with Energy

single‑B midstream loans (249–340bps). Moreover it trades ~62bps wide of the BB loan

index (255bps) and 115bps wide to VENLNG 2034 bonds. We see this dislocation as Table of Contents

excessive given our expectations for potential liabilities, expected parental support and Relative Value 2

the improving cash flow outlook at Venture Global, Inc. (VG).

Investment Positives and Concerns 3

Stable cash flows, leverage improving in 2027 Company Overview 3

CPF is a wholly owned subsidiary of VG, which owns a 77% interest in Calcasieu Pass, Arbitration risk at VGCP 3

LLC (VGCP) a LNG liquefaction facility based in the Louisiana that is on the cusp of CPF Capital Structure and Cash Flow Profile 3

being investment grade rated (Ba1/BBB-) at both rating agencies. It benefits from highly Rating Agency Considerations 3

visible, contracted cash flows at VGCP, which is 100% sold under long-term take or pay Valuation and Asset Coverage 3

contracts with 85% contracted under 20-year contracts. Weighted average offtaker Appendix 3

credit rating is A2/A. We see CPF Debt/ Cash flow to CPF modestly increasing to 5.1x in

2026 from 5.0x today, then decreasing to 4.3x in 2027 as Excess Capacity volumes ramp

Gregg Brody

further at VGCP.