Aug 1, 2016

Capstone Partners Advised Navajo Transitional Energy Company on a $115 Million Senior Secured Acquisition Financing for the Navajo Coal Mine

Capstone Partners advised Navajo Transitional Energy Company (NTEC) on a senior secured acquisition financing for the Navajo Mine from BHP Billiton.  This coal mine is the sole fuel source for the Four Corners Power Plant.  Both the mine and the plant are located on the Navajo Nation.

Securing financing is a milestone for NTEC. With the advisement from Capstone, NTEC secured a Credit Facility on our company’s merit without having to seek the financial backing of the Navajo Nation, the first for a tribal enterprise.

Clark MoseleyCEO, NTEC

The Credit Facility consists of a $95 million term loan and a $20 million revolving credit commitment provided by 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 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.

Raymond McCormick, Managing Director at Capstone commented, “securing senior debt in the coal industry today is a challenging task, but with the professionalism of NTEC management and management committee, a successful funding conclusion was obtained under very favorable terms and conditions.” Ricardo Campoy, Managing Director at Capstone continued, “we are excited to have played a role in this growth story and look forward to seeing the Company grow and prosper providing significant wealth creation for the Navajo Nation and its people.”