Navajos sign historic agreement to refinance $60 million loan
$100 bills: Money illustration.
FARMINGTON, N.M.
The Navajo Nation made financial history Tuesday when it finalized an agreement allowing it to issue bonds on the world market.
Members of the Navajo Nation Council met with officials from KeyBanc Capital Markets in New York City to seal a deal that means the Nation can refinance a $60 million loan from KeyBanc and pay it back at a lower interest rate. The loan, which dates from 2010, helped cover construction costs of public safety and judicial complexes in Kayenta, Tuba City, Crownpoint and Ramah.
The sale of bonds also diversifies the Nation’s financial portfolio, helping it build credibility and attract future investors, said LoRenzo Bates, speaker of the Navajo Nation Council. It also will help the Nation finance its own infrastructure needs.
“This is a historic move,” Bates said. “This gets us into a financial arena we have never been at.”
The deal, more than a decade in the making, gained traction in June when the Council met in special session and approved a measure calling for the Nation to refinance its $60 million loan. According to the terms of that loan, the Nation would have had to pay a lump sum of more than $53 million in July.
Delegate Alton Joe Shepherd, who sponsored the bill, said refinancing would result in lower interest rates, thus saving the Nation millions of dollars over the life of the extended loan. The deal also means the Nation is establishing credit in the global market – and itself as a sovereign Nation, Shepherd said. No federal entities were involved in the agreement.
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