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Get filing alertsNextDecade closes $1.0B term loan to reduce Rio Grande LNG project debt
Filed June 18, 2026 · Period ending June 17, 2026 · ~1 min read
Key Changes
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Subsidiary closed $1.0B term loan at 7.05% interest, maturing June 2033, with proceeds primarily funding equity contribution to Rio Grande LNG to pay down existing project-level debt—a debt-for-equity recapitalization reducing leverage on the operating facility.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Borrower must maintain debt service coverage ratio of at least 1.05x starting 90 days after project completion; mandatory prepayment at 101% upon change of control, at par from asset sales or casualty proceeds.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Interest paid in-kind (added to principal) for first three years unless borrower elects cash payment, preserving liquidity during facility ramp-up; semi-annual payments begin September 2026.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Prepayment before June 2029 requires undisclosed call protection premium; 101% of principal between June 2029–2030; at par after June 2030.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Loan secured by substantially all borrower assets including equity interest in Rio Grande LNG Holdings; intercreditor agreement governs future pari passu debt at holding company level.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
NextDecade closed a $1.0 billion term loan at its Rio Grande LNG Intermediate HoldCo subsidiary on June 17, 2026. The proceeds will primarily fund an equity contribution to the Rio Grande LNG operating entity, which will use the cash to pay down existing project-level debt on the first three LNG trains.
This is a debt-for-equity recapitalization: the company is reducing leverage at the operating asset while adding holding-company debt at 7.05% interest, maturing in seven years. Retail holders should note the tight 1.05x debt service coverage covenant, which requires cash flow to exceed debt service by only 5% once the project is complete.
The loan also includes a change-of-control trigger requiring mandatory prepayment at 101% of principal. Interest will be paid in-kind for the first three years, deferring cash outlays during ramp-up but increasing the principal balance. The structure suggests the company is optimizing its capital stack as the Rio Grande facility nears full operations, trading project-level debt for holding-company debt with more flexible terms during the critical commissioning period.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
The RGLNG HoldCo Loans will mature on June 17, 2033. Interest will accrue on the RGLNG HoldCo Loans at a rate equal to 7.05% per annum, with such interest payable semi-annually on March 30 and September 30 of each year, beginning on September 30, 2026 (or the next succeeding business day). Interest on the RGLNG HoldCo Loans will be paid in-kind until the first interest payment date after the third anniversary of the Closing Date unless elected by RGLNG HoldCo Borrower to pay in cash.
The loan matures in seven years (June 2033) and carries a 7.05% annual interest rate. Interest is paid semi-annually but will be paid in-kind (added to principal) for the first three years unless the borrower elects cash payment. This PIK feature defers cash interest expense during the facility's ramp-up period, preserving liquidity while the project reaches full operations.
Added in current filing · verify on EDGAR →
At any time or from time to time prior to June 17, 2029, RGLNG HoldCo Borrower may prepay all or a part of the RGLNG HoldCo Loans by paying the principal of the RGLNG HoldCo Loans to be prepaid plus the “call protection amount” set forth in the Credit Agreement, plus accrued and unpaid interest. At any time or from time to time between June 17, 2029 and June 17, 2030, RGLNG HoldCo Borrower may prepay all or a part of the RGLNG HoldCo Loans by paying 101% of the principal of the RGLNG HoldCo Loans to be prepaid plus accrued and unpaid interest, and any time on or after June 17, 2030, prepay the RGLNG HoldCo Loans by paying the principal of the RGLNG HoldCo Loans to be prepaid plus accrued and unpaid interest.
Prepayment before June 2029 requires a call protection premium (amount not disclosed). Between June 2029 and June 2030, prepayment costs 101% of principal. After June 2030, the loan can be prepaid at par. These terms protect lenders from early refinancing while allowing the company flexibility after four years.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 23, 2026 · How we verify