Key Highlights

  • Rio Grande LNG, LLC completed a $1,000 million issuance of 5.250% senior secured notes.
  • Additional tranches consist of $500 million at 5.500%, $1,250 million at 5.750% and $750 million at 6.150%.
  • All notes may be redeemed at 100% of principal plus accrued interest, with a make‑whole premium applicable prior to certain redemption windows, and the issuer must make a repurchase offer at 101% in a change‑of‑control scenario.

NextDecade Corp (NASDAQ: NEXT) announced that its subsidiary Rio Grande LNG, LLC has successfully closed a four‑tranche senior secured note offering on July 2 2026. The transaction features a $1,000 million series bearing a 5.250% coupon and three further series with distinct interest rates and principal amounts.

First Tranche

The initial tranche consists of $1,000 million of notes with a 5.250% interest rate. Interest is payable semi‑annually in cash, and the notes mature on the date specified in the indenture. This tranche forms the cornerstone of the offering and aligns with the company’s strategy to secure long‑term financing.

Second Tranche

The second tranche comprises $500 million of notes that carry a 5.500% coupon. Like the first tranche, interest is paid semi‑annually, and the maturity date is defined in the governing documents. This tranche expands the capital base and diversifies the funding profile.

Third Tranche

The third tranche represents $1,250 million of notes priced at a 5.750% interest rate. Semi‑annual cash interest payments are scheduled in line with the other series, and the maturity terms are outlined in the indenture. The size of this tranche reflects investor demand for senior secured exposure at a moderately higher coupon.

Fourth Tranche

The final tranche involves $750 million of notes offering a 6.150% yield. Interest is payable semi‑annually, and the notes mature as set forth in the applicable agreement. This tranche provides additional liquidity while accommodating a higher rate environment.

Use of Proceeds

Rio Grande LNG intends to apply the net proceeds to reduce borrowings under its existing credit facility and to cover the costs associated with the issuance. By refinancing a portion of its debt portfolio, the company aims to strengthen its balance sheet and preserve financial flexibility for future projects in the LNG sector.

Redemption and Repurchase Provisions

Each series of notes includes a redemption right that permits the issuer to retire the securities at 100% of the principal amount together with accrued interest. Prior to designated redemption windows, ranging from one month to six months before maturity, a make‑whole premium may be applied, as described in the indenture. Additionally, the indenture obligates the issuer to extend a repurchase offer at 101% of principal in the event of a change of control, while other specified events trigger redemption at par.

Market Access and Regulatory Framework

The notes were placed with qualified institutional buyers under Rule 144A and with non‑U.S. Consequently, the securities were not registered under the Securities Act of 1933 or any applicable state securities statutes. This private placement methodology is consistent with standard practice for senior secured debt offerings of comparable scale.

Sector Context

The financing comes at a time when the liquefied natural gas (LNG) industry is experiencing heightened demand for capital to support project development and expansion. Senior secured notes remain a favored instrument for infrastructure‑heavy companies seeking fixed‑rate financing while preserving senior claim status. By diversifying its debt structure across multiple tranches and interest rates, NextDecade positions itself to meet upcoming capital requirements and to capitalize on favorable market conditions.

FAQs

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