Published August 2, 2016
FARMINGTON, NEW MEXICO – Navajo Transitional Energy Company (NTEC) has closed on a $115 million Senior Secured Credit Facility (Credit Facility) with a group of banks led by KeyBank National Association as Administrative Agent and Collateral Agent and Keybanc Capital Markets, Inc. as Coordinating Lead Arranger and Mandated Lead Arranger (collectively KeyBank). The Credit Facility consists of a $95 million term loan and a $20 million revolving credit commitment. The proceeds from the term loan were used to pay the remaining balance of a promissory note issued to BHP Billiton in 2013 for the purchase of Navajo Mine and for fees and expenses of the transaction.
“This is a milestone day for NTEC. NTEC has secured the Credit Facility on our company’s merit without having to seek the financial backing of the Navajo Nation. The term loan allows NTEC to continue executing its business plan and the revolving credit commitment will provide financial flexibility in the future. NTEC is excited to move forward with its plans for the Navajo Mine and the transition to Bisti Fuels, a subsidiary of North American Coal Corporation, as the new contract mine manager at the end of 2016” said NTEC CEO Clark Moseley.
“We want to thank our partners at KeyBank for leading this transaction and Sumitomo Mitsui Banking Corporation and Caterpillar Financial Services Corporation in supporting NTEC and the Navajo Nation. This transaction positions KeyBank as one of the leading financial institutions on the Navajo Nation” said Moseley.
NTEC Management Committee Chairman Steve Gundersen said the closing of this financing on commercially favorable terms without the requiring the financial backing of the Navajo Nation demonstrates that the Navajo Mine is a viable business.
“NTEC has become financially stronger in an industry that has experienced turbulence in recent years. This financing will allow the company to continue to provide the Navajo Nation and its people a sustainable revenue stream for many years,” Gundersen said.
NTEC purchased Navajo Mine in December 2013, making the Navajo Nation the first tribe in the United States to take ownership of its mineral resources with its own energy company on this scale. The Navajo Nation negotiated the purchase price of Navajo Mine with BHP Billiton after it reached an agreement for a coal supply agreement with the owners of the Four Corners Power Plant.
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