8-KOther EventsExhibits & Filings

FEDEX CORP 8-K Report, Corporate Update (Aug 4, 2020)

Filed August 4, 2020For Securities:FDX

Summary

FedEx Corporation (FDX) filed an 8-K on August 3, 2020, detailing a significant financing transaction. On July 30, 2020, the company, through its subsidiary Federal Express Corporation, entered into an underwriting agreement to issue and sell pass-through trust certificates. This transaction was facilitated by a newly formed pass-through trust and involved prominent underwriters including Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and Morgan Stanley & Co. LLC. This move indicates FedEx's strategy to leverage its assets for funding. The issuance of pass-through trust certificates typically involves securitizing a pool of assets, such as receivables or future revenue streams, to raise capital. Investors should note that this type of financing can be an efficient way for companies to obtain funds without diluting equity. The involvement of reputable underwriters suggests the transaction was structured to attract institutional investors.

Key Highlights

  • 1FedEx entered into an underwriting agreement on July 30, 2020, to issue and sell pass-through trust certificates.
  • 2The financing transaction was conducted through a newly formed pass-through trust.
  • 3Key underwriters for the issuance include Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and Morgan Stanley & Co. LLC.
  • 4The filing provides consent letters from independent appraisal firms (mba Aviation, Aircraft Information Services, Inc., and Avitas, Inc.), suggesting asset valuation was a component of the securitization.
  • 5This action indicates FedEx is utilizing securitization as a method to raise capital.
  • 6The specific assets being securitized are not detailed in this 8-K, but it's a common method for financing operational assets or future cash flows.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the execution of an underwriting agreement for the issuance and sale of pass-through trust certificates, a form of securitized financing.

Pass-through trust certificates are financial instruments created by pooling specific assets (like receivables or future revenues) and then selling interests in that pool to investors. The cash flows generated by the underlying assets are 'passed through' to the certificate holders.

FedEx likely uses this type of financing to access capital efficiently, potentially at a favorable cost, by leveraging its assets. Securitization can offer an alternative to traditional debt or equity financing and can help manage the company's balance sheet.

No, this 8-K filing does not specify the exact assets being securitized. It primarily reports the legal agreement and the parties involved in the financing transaction.