Hallador Secures $600M Term Loan from Kennedy Lewis to Advance Turtle Creek Gas Project
HNRG is trading near its 52-week low of $13.65 (7.6% above the low).
Summary
Hallador closed a $600M senior secured term loan with Kennedy Lewis to fund the Turtle Creek gas project, with $550M funded at closing and a $50M delayed draw. The deal refinances existing debt and addresses the majority of the project's sub-$800M cost, but carries high interest rates and a full cash flow sweep after commercial operation.
Key Events · Financing and Capital Events · HNRG
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$600M Term Loan Closed
On September 15, 2026, Hallador and Turtle Creek Gas Holdings entered a $600M senior secured term loan with Kennedy Lewis, with $550M funded at closing and a $50M delayed draw available for 12 months.
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Expensive Financing Terms
Pre-COD interest is 3.5% cash plus SOFR + 4.50% PIK; post-COD it rises to SOFR + 8.00% cash with a 3.5% SOFR floor. A 2.5% commitment fee, 100% excess cash flow sweep after COD, and 1.35x minimum MOIC (1.50x on extension) apply.
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Refinances Existing Debt
Approximately $120M of proceeds will repay the existing $45M delayed draw term loan and $75M revolver with Texas Capital Bank, with the remainder funding turbine purchases, refurbishment, and project development.
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Financial Covenants
Covenants include minimum unrestricted cash of $10M and 1.15x debt service coverage ratio starting December 31, 2026, plus a 9.00x leverage ratio (8.00x thereafter) after COD. Equity cure rights are limited to two of any four consecutive quarters and three times total.
Analysis · HNRG · Energy & Transportation
Hallador has secured a $600 million senior secured term loan from Kennedy Lewis, with $550 million funded at closing and a $50 million delayed draw, plus the ability to add a $75 million super-priority revolver. This financing represents the largest single step toward funding the sub-$800 million Turtle Creek natural gas project. The terms are expensive — pre-COD interest of 3.5% cash plus SOFR + 4.50% PIK, rising to SOFR + 8.00% after commercial operation — reflecting the lender's risk premium on a project still in development. The deal removes near-term liquidity pressure from the $338.8 million turbine payment due in H2 2026 and refinances the existing Texas Capital Bank debt, but it also adds significant leverage and a 100% excess cash flow sweep that will divert post-COD cash to debt repayment. Management's stated goal of little to no equity dilution hinges on the project reaching COD on schedule and refinancing at better terms.
How filings like this one have moved
In the 30 days to Sep 17, 2026, 35.5% of the 1165 measured filings Wiseek scored 8 moved their stock by 5% or more by the next session's close. The median move was -0.44%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, HNRG was trading at $14.69 on NASDAQ in the Energy & Transportation sector, with a market capitalization of approximately $692.5M. The 52-week trading range was $13.65 to $24.70. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.