NACG Closes $200M 7% Senior Unsecured Note Issuance

North American Construction Group closed a $200 million private placement of 7% senior unsecured notes due June 16, 2031, the company said Tuesday.

NACG will use the proceeds to repay debt under its existing credit facility and for general corporate purposes. The notes were sold under private placement exemptions in Canada and to qualified institutional buyers in the U.S. under Rule 144A. They have not been registered with the Securities and Exchange Commission.

National Bank Financial led the underwriting. ATB Capital Markets, Scotia Capital, and TD Securities also served on the syndicate, along with BMO Nesbitt Burns, CIBC World Markets, Canaccord Genuity, and Raymond James.

The notes carry a fixed 7% coupon and a five-year maturity. They are unsecured, putting noteholders behind secured creditors in the company's capital structure. NACG's existing credit facility was due to mature earlier; the new issuance extends the maturity profile but at a higher cost of debt.

NACG provides heavy civil construction and mining services in Australia, Canada, and the U.S. The company's cash flow is tied to mining capex cycles and heavy equipment demand. The higher interest expense will reduce net income if commodity prices fall or project spending slows, the company's risk disclosures note.

The offering closed Tuesday. No update was given on the size of the outstanding credit facility balance.