He Helped Client Get $42M In Financing Despite Terrible Bond Market
The Deal: The executive director of Coalview Ltd. completed $42 million in project financing for a subsidiary, Coalview Centralia LLC.
Details: Coral Gables-based Coalview bought Beard Technologies Inc. in April 2011 from Beard Oil Inc. Beard Technologies was in talks with TransAlta USA, a power generating company servicing communities in the Northwest, to build a fine coal recovery plant.
Fine coal recovery retrieves coal debris, which is considered waste in normal coal-mining operations, from waste impoundments and sells it.
TransAlta originally intended to pay for the plant. Schwedel proposed TransAlta keep its money but guarantee fine coal purchases for 12 years. In exchange, Coalview would finance, build, own and operate the plant.
Schwedel approached the Washington Economic Development Finance Authority, a government entity that acts as a conduit for revenue bonds for projects in manufacturing, processing and waste disposal. WEDFA was to provide $26.5 million in environmental revenue bonds.
"It's the first time that we are aware of that this type of financing has been done for this type of project," Schwedel said.
TransAlta agreed to provide more than $10 million in capital equipment contributions.
Preparing the bond issue turned out to be extremely complicated, Schwedel added. The remaining $5.2 million was equity provided by Coalview, with Schwedel personally putting down $3 million.
"When you're creating a bond instrument, you're starting from scratch. It's not like a home loan where those deal documents are boilerplate. They're already baked," he said.