Blackstone Deal Faces Scrutiny From New Mexico

Blackstone is facing continued regulatory scrutiny in New Mexico over its proposed acquisition of TXNM Energy. In a filing on Wednesday, the New Mexico Department of Justice questioned whether replacement financing used to reverse an unauthorized $400 million stock sale could create indirect costs for utility ratepayers.

The review follows a July 2 decision by the New Mexico Public Regulation Commission declaring the issuance of roughly 8 million TXNM shares void without prior regulatory approval. To comply, TXNM borrowed $400 million via a 30-month Wells Fargo term loan to repay Blackstone affiliate Troy TopCo and canceled the stock. Troy TopCo also returned $13.3 million in received dividends.

State justice officials raised concerns that the extra borrowing could hurt TXNM's credit profile, noting company estimates that key credit measures could drop by about 80 basis points under Moody's methodology and 100 basis points under S&P Global Ratings. On 10 September, Eric Chavez, a spokesperson for operating subsidiary Public Service Company of New Mexico, stated that TXNM resolved the issue by issuing compliant equity and repaying the Wells Fargo loan.

Blackstone first announced its deal to acquire TXNM, whose utility serves nearly 550,000 customers, on 19 May 2025. Both companies have extended their merger agreement termination deadline to 31 May 2027 while regulatory reviews and court guidance proceed.