Note 16 - Subsequent Events

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

Note 16 — Subsequent Events

FID Equity Transactions

On July 12, 2023, the Company made a positive FID to construct Phase 1 of the Terminal. In conjunction with FID, Rio Grande LNG Intermediate Super Holdings, LLC, an indirect subsidiary of the Company (the “NextDecade Member”), entered into an amended and restated limited liability company agreement (the “JV Agreement”) of Rio Grande LNG Intermediate Holdings, LLC (“Intermediate Holdings”), and the other members party thereto.  Following such transactions, Intermediate Holdings indirectly wholly owns Rio Grande, which will own Phase 1 of the Terminal.  The members of Intermediate Holdings, including the NextDecade Member, committed to fund $6.2 billion in aggregate to Intermediate Holdings.  The NextDecade Member committed to fund cash contributions of approximately $283 million to Intermediate Holdings, including approximately $125 million in contributions paid before FID, and as of the date of issuance of these financial statements, NextDecade Member has a remaining equity commitment of approximately $69.4 million. 

 Except for the Member Reserved Matters, as defined below, the affairs of Intermediate Holdings will otherwise be managed by a board of managers (the “Intermediate Holdings Board”). The Intermediate Holdings Board will be composed of up to four managers appointed by the NextDecade Member (the “Class A Managers”), including one Class A Manager designated by the TTE Member, and managers appointed by members holding a minimum percentage of the Class B limited liability company interests in Intermediate Holdings (the “Class B Managers”). Approval of any matter by the Intermediate Holdings Board will require the consent of a majority of the Class A Managers voting on the matter and Class B Managers representing a majority of the Class B limited liability company interests in Intermediate Holdings for such matter, as applicable; provided that (i) certain specified “qualified matters,” “supermajority matters,” and “unanimous matters” are reserved to the approval of the members of Intermediate Holdings (the “Member Reserved Matters”) holding a requisite percentage of the applicable classes of limited liability company interests in Intermediate Holdings, and (ii) related party transactions will be subject to approval in accordance with the procedures specified in the JV Agreement.

FID Debt Transactions

On July 12, 2023, Rio Grande entered into a Credit Agreement (the “CD Credit Agreement”) that provides for the following facilities:

● A construction/term loan in an amount up to $10.3 billion available to finance partially the design, engineering, development, procurement, construction, installation, testing, completion, ownership, operation and maintenance of Phase 1, to pay certain fees and expenses associated with the CD Credit Agreement and the loans made thereunder, and to fund the debt service reserve account relating thereto, up to an amount equal to six months of scheduled debt service; and

● a revolving loan and letter of credit facility in an amount up to $500 million available to Rio Grande to finance certain working capital requirements of Rio Grande.

On July 12, 2023, Rio Grande entered into a TCF Credit Agreement (the “TCF Credit Agreement” and together with the CD Credit Agreement, the “Credit Agreements”) that provides for a two-tranche construction/term loan facility in an aggregate amount up to $800 million available to Rio Grande to partially finance the design, engineering, development, procurement, construction, installation, testing, completion, ownership, operation and maintenance of Phase 1, to pay certain fees and expenses associated with the TCF Credit Agreement and the loans made thereunder, and to fund the debt service reserve account relating thereto, up to an amount equal to six months of scheduled debt service. TotalEnergies Holdings SAS (“Total Holdings”) agreed to provide contingent credit support to the lenders under the TCF Credit Agreement pursuant to, and subject to the terms and conditions of, a support agreement entered into at closing, pursuant to which Total Holdings agreed that it will pay past due amounts owing from Rio Grande under the TCF Credit Agreement upon demand.

On July 12, 2023, Rio Grande entered into a Note Purchase Agreement through which it sold $700 million of 6.67% Secured Senior Notes due 2033 (the “Notes”).  The Notes were issued pursuant to an indenture between Rio Grande and Wilmington Trust, National Association as trustee and accrue interest that is payable semi-annually in cash on March 30 and September 30 each year, beginning on September 30, 2023.

Effective July 12, 2023, Rio Grande amended the Contingent Interest Rate Swaps disclosed in Note 5 - Derivatives and executed additional interest rate swaps to protect against interest rate volatility and hedge a portion of the floating-rate interest payments provided for under the Credit Agreements.  As a result of amending the Contingent Interest Rate Swaps, the derivative liability of $110.9 million at June 30, 2023 was reversed in July 2023 upon amendment.  Effective July 12, 2023, Rio Grande has the following Interest Rate Swaps outstanding (in thousands):

Initial Notional Amount		Maximum Notional Amount		Maturity	Weighted Average Fixed Interest Rate Paid		Variable Interest Rate Received
$	123,000	$	8,500,000	July 12, 2030		3.4%	USD - SOFR

Following completion of the transactions set forth above, on July 12, 2023, Rio Grande issued a final notice to proceed to Bechtel Energy, Inc. under the EPC agreements for Phase 1 at the Terminal.

On July 12, 2023, Rio Grande commenced its site lease with the Brownsville Navigation District for the 984 acres on which Phase 1 of the Terminal will be constructed. Refer to Note 14 - Commitments and Contingencies for further information on the Rio Grande Site Lease.

On July 17, 2023, the Company completed its sale of the Equity Interests in the Rio Bravo Pipeline Company, LLC to Buyer.  As part of the completion of the sale, the Company received the remaining $4.4 million of purchase price, and de-recognized the assets of Rio Bravo as well as the non-current liability associated with the Buyer option to put the Equity Interests back to NextDecade LLC.  Refer to Note 3 - Sale of Equity Interests in Rio Bravo for further information.

Conversion of Convertible Preferred Stock, Issuance of Common Stock

The Convertible Preferred Stock converted into approximately 59.5 million shares of common stock on July 26, 2023. Refer to Note 9 - Convertible Preferred Stock and Common Stock Warrants for further information on the Convertible Preferred Stock.

On July 27, 2023 the second tranche of the TTE Private Placement discussed in Note 10 - Stockholders' Equity closed, pursuant to which the Company sold 22,072,103 shares of common stock at a price of $4.9837 per share for a purchase price of approximately $110 million to the TTE Member.