New Fortress Energy secures $1.27 billion credit agreement

New Fortress Energy Inc. (NASDAQ:NFE) has entered into a series of financial agreements that will see the energy infrastructure company secure a total commitment of $1.27 billion in term loans. The agreements, detailed in a recent 8-K filing with the Securities and Exchange Commission, involve amendments to existing credit facilities and the establishment of new financial obligations.

On Monday, the company, which specializes in natural gas distribution, amended its existing term loan B (TLB) to permit the incurrence of incremental term loans amounting to $425 million. These funds are primarily allocated for capital expenditures related to the company’s FLNG2 Assets and other corporate expenses. Additionally, the amendment allows for the exchange of initial term loans for new loans, bringing the total commitments to $847.44 million for the exchanged term loans and $1.27 billion overall.

The interest rate for the new term loans is set at either a base rate plus a 4.50% margin or a Term SOFR rate plus a 5.50% margin. Prepayment premiums will apply, with a "make whole" premium before the first anniversary of the closing date, 2% between the first and second anniversaries, and 1% between the second and third anniversaries. The maturity date for these loans is October 30, 2028, aligning with the original term loans’ maturity.

In conjunction with the term loan amendments, New Fortress Energy also revised its uncommitted letter of credit and reimbursement agreement and entered into an eleventh amendment to another credit agreement, which allows for additional loans under the TLB.

The company’s actions on Monday further involved the fourth amendment to a separate credit agreement, effectively reducing the available commitments to zero and preventing future borrowings under the amended term loan A (TLA).

The closing of these financial arrangements is contingent upon certain conditions, including the completion of the company’s audit for the fiscal year ended December 31, 2024. While the company has outlined the terms of these agreements, there is no certainty that the conditions for closing will be met.

This financial restructuring is based on a press release statement and provides New Fortress Energy with substantial capital to support its ongoing projects and corporate needs.

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