Methanex Corp. refinanced a $291 million Natgasoline joint venture bond, pushing out mandatory amortization payments and freeing cash flow for higher-cost debt repayment.
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Methanex Corp. said Natgasoline LLC, the methanol joint venture it owns equally with Consolidated Energy Ltd., priced $290.95 million in tax-exempt bonds that will replace a maturing 2018 issue.
The new bonds carry a 4.75% coupon, a mandatory tender date of Aug. 1, 2036, and a final maturity of Aug. 1, 2046. Proceeds will repay the 2018 bonds, also $290.95 million, which were subject to a semi-annual amortization schedule through a sinking fund redemption that began Oct. 1, 2025.
Dean Richardson, Methanex's chief financial officer, said the refinancing "defer[s] mandatory amortization payments that were coming due" and gives the entity more flexibility to use operating cash flow for potentially repaying higher-cost borrowings.
The move pushes principal repayment further out, swapping the 2031 maturity of the old bonds for a 10-year extension. The 2018 bonds required a sinking fund that was eating into cash flow before maturity; the new structure lacks that feature through its 2036 mandatory tender date.
Closing is expected by Aug. 28, subject to standard conditions.
Methanex, the world's largest methanol supplier by volume, holds a 50% stake in the Natgasoline plant in Beaumont, Texas. The facility runs on natural gas, giving it a structural cost advantage over coal-based Chinese producers that dominate the global methanol market.
Methanol prices have softened in 2026 as new Chinese coal-to-olefins capacity pulls feedstock demand lower. The spread between U.S. Gulf Coast gas-based methanol and Chinese coal-based methanol has widened, favoring producers like Methanex that operate on cheap North American gas. That margin is what makes the Natgasoline refinancing both possible and prudent – the venture's cash flows are strong enough to support a new bond issue at 4.75% while retiring the old amortizing structure.
The deal leaves the venture's balance sheet more or less where it was in gross debt terms, but the removal of the sinking fund means more cash stays inside the joint venture each year. Richardson flagged the possibility of using that freed-up cash to pay down the venture's higher-cost debt – an explicit signal that leverage reduction is a priority.
Methanex reported second-quarter 2026 adjusted EBITDA of $172 million, down from $208 million a year earlier, reflecting lower methanol prices on average. The company's debt at the corporate level stood at $1.2 billion at mid-year, with $454 million in cash.
Shares of Methanex trade on the TSX under the symbol MX and on the Nasdaq under MEOH.
Mission Economic Development Corp., a Texas development authority, issued the bonds on behalf of Natgasoline. The tax-exempt structure is standard for industrial projects in the region and lowers the venture's effective borrowing cost below what a comparable taxable corporate bond would carry.
For Natgasoline specifically, the refinancing removes what was becoming a cash-flow headwind. The 2018 bonds' sinking fund had kicked in, requiring semi-annual principal paydowns that would have intensified through 2031. Replacing that structure with a bullet maturity picture through 2036, then a full amortization from 2036 to 2046, gives the joint venture breathing room to reinvest in the plant or pay down its more expensive debt.
The natural next question for Methanex is whether the parent company will apply a similar logic to its own corporate debt. Its nearest bond maturity is $450 million due in 2027, which it could refinance at current rates or pay down with free cash flow. The company has been conservative with its balance sheet since the 2008 financial crisis, when it nearly went under after building its Chilean plant on floating-rate debt just as methanol prices collapsed. That history explains why management prioritizes debt reduction even when the product market is profitable.
The 4.75% coupon on the Natgasoline bonds is roughly in line with what investment-grade industrial companies pay in the tax-exempt market today. It reflects both the venture's cash flow and the bond's structure: mandatory tender in 2036 gives holders the right to put the bonds back to the issuer, limiting duration risk.
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