HALLADOR ENERGY CO 8-K

What Happened
Hallador Energy Company (HNRG) announced on March 5, 2026 that it entered into a Credit Agreement providing a $75 million senior secured revolving credit facility and a $45 million senior secured delayed‑draw term loan (totaling $120 million). Texas Capital Bank is administrative agent (with Old National Bank as joint lead arranger and First Financial Bank, N.A. as a lender). The facilities are secured by substantially all assets of the company and certain subsidiaries and mature on March 5, 2029. The company also terminated its prior credit agreement with PNC Bank effective March 5, 2026 (no termination penalty).

Key Details

• Total initial commitments: $75.0M Revolving Credit Facility + $45.0M Delayed Draw Term Loan Facility (Delayed Draw becomes available only upon certain conditions).
• Revolver subfacilities: $25.0M for letters of credit and $10.0M for swingline loans; Company may seek up to $25.0M additional commitments (subject to conditions).
• Interest and fees: Borrowings at either Base Rate or Term SOFR plus a margin (Base Rate loan margin 2.25%–2.75%; Term SOFR loan margin 3.25%–3.75%); Base Rate is the greater of Prime, Fed Funds + 0.50%, or Term SOFR + 1.00%. Commitment fee of 0.50% on daily unused revolving commitments.
• Covenants and financial tests: includes affirmative/negative covenants and financial covenants (total leverage ratio and senior secured leverage ratio with specified ranges tied to Delayed Draw availability, a minimum liquidity threshold of $20M–$30M prior to Delayed Draw availability, and a fixed charge coverage ratio of 1.25x).
• Use of proceeds: to refinance obligations under the prior PNC credit facility and for working capital and general corporate purposes.

Why It Matters
This facility provides Hallador with committed liquidity and replaces its prior PNC credit agreement, reducing immediate refinancing uncertainty. The new secured financing increases the company’s borrowing capacity but also imposes collateral pledges and financial covenants that management must satisfy; these covenants (leverage, liquidity, fixed charge coverage) can limit dividend, acquisition, or debt actions if not met. Investors should watch covenant compliance, the conditions to draw the delayed‑draw tranche, and any future use of incremental commitments or borrowings that could affect leverage and liquidity.