Thursday, March 10, 2011

Cheniere Energy and Cheniere Partners rise on Citigroup comments

NEW YORK - Cheniere Energy Inc. (NYSE: LNG) and Cheniere Energy Partners (NYSE: CQP) recovered some of the market capitalization they lost as a result of the disclosure on March 8 that Cheniere Inc. had filed a defamation suit against a hedge fund that had alleged it was in default on some notes.

CPQ alone lost $720 million in market cap on March 8 as a result of the disclosure.

Citigroup on the morning of March 9 said Cheniere Energy Inc.'s Sabine Pass unit appears not be in default under terms of the notes brought into question by the hedge fund.

Cheniere Inc. filed a defamation lawsuit against the hedge fund that alleged it had strayed from generally accepted accounting principles, but Sabine Pass, Cheniere Energy and Cheniere Energy Partners L.P. "all received unqualified audit opinions from Ernst & Young" last week, Citigroup said.

On March 8, LNG and CQP fell 35 percent and 22 percent respectively, Sabine Pass, LNG, and CQP "all received unqualified audit opinions from Ernst & Young," last week, Citigroup noted, adding "We view recent volatility around the price of LNG shares and units of CQP as somewhat unfounded...In our opinion, Sabine Pass LNG is not in default."

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