Council refinances $60 million KeyBank loan
$100 bills: Money illustration.
WINDOW ROCK
To prevent defaulting on a loan it received from KeyBank in 2010, the Navajo Nation Council passed a bill Tuesday that allowed it to refinance on a short-term basis.
In other words, the tribe was able to enter the Global Investment Market on a short-term basis prior to July 1, when the $60 million loan from KeyBank matures.
The 15-1 vote by Council on Tuesday gave the Navajo Nation clearance to proceed with the issuance and sale of 2015 bonds by ultimately refinancing the 2010 loan on a long-term basis.
According to the tribe’s Office of the Controller, it has obtained a proposal from KeyBank to refinance the 2010 loan on a short-term basis, before the long-term financing pans out.
In 2010, the tribe secured a $60 million loan from KeyBank, along with funds from the American Recovery and Reinvestment Act, to build a slew of public safety complexes including those built in Crownpoint and Ramah, N.M. and Tuba City and Kayenta, Ariz.
Alton Joe Shepherd
Council delegate Alton Joe Shepherd (Jeddito/Cornfields/Ganado/Kin Dah Lichíí/Steamboat), sponsor of the bill, said that short-term financing is critical for the tribe, so that it doesn’t default on the KeyBank loan.
“The reason why this legislation was introduced was to extend that,” Shepherd said about the need to approve short-term refinancing before long-term financing occurs to get future bonds.
By refinancing the loan, it also prevents the tribe from having to pay a lump some payment in the amount of $53.5 million, due by July 1, according to terms of the original loan.
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