8-KMaterial AgreementsFinancial EventsExhibits & Filings

FEDEX CORP 8-K Report, Material Agreement (Aug 13, 2020)

Filed August 13, 2020For Securities:FDX

Summary

FedEx Corp (FDX) filed an 8-K on August 13, 2020, to report on the entry into a material definitive agreement related to the financing of aircraft. Specifically, FedEx Express, a subsidiary, issued $970 million in Equipment Notes secured by thirteen Boeing 767-300F and six Boeing 777F aircraft. These notes were used to finance aircraft delivered between September 2015 and June 2020. This transaction was structured through a pass-through trust arrangement where the Equipment Notes were purchased by a trust using proceeds from the sale of Certificates. The issuance of these notes and certificates was registered under the Company's existing shelf registration statement. Investors should note the fixed interest rate of 1.875% on the Equipment Notes, with semiannual payments beginning in February 2021 and a final maturity expected in February 2034. The Company's guarantee provides an unconditional backing for these obligations.

Key Highlights

  • 1FedEx Express issued $970 million in Equipment Notes on August 13, 2020.
  • 2The notes are secured by 13 Boeing 767-300F and 6 Boeing 777F aircraft.
  • 3The financing structure involves a pass-through trust and the issuance of Certificates.
  • 4The Equipment Notes bear a fixed interest rate of 1.875% per annum.
  • 5Interest and principal payments are scheduled semiannually, starting February 20, 2021.
  • 6The final maturity date for the Equipment Notes is February 20, 2034.
  • 7FedEx Corporation provided a full and unconditional guarantee for these payment obligations.

Frequently Asked Questions

This 8-K filing primarily announces the entry into a material definitive agreement by FedEx Express, a subsidiary of FedEx Corporation, concerning the issuance of $970 million in Equipment Notes to finance a fleet of Boeing aircraft. This is a financing transaction aimed at securing capital for the company's assets.

The Equipment Notes are secured by a fleet of 19 aircraft, comprising thirteen Boeing 767-300F and six Boeing 777F aircraft. These aircraft were delivered new to FedEx Express between September 2015 and June 2020.

The Equipment Notes have an aggregate principal amount of $970 million, bear interest at a fixed rate of 1.875% per annum, and are payable semiannually starting February 20, 2021. The final maturity is scheduled for February 20, 2034. FedEx Corporation fully guarantees these obligations.

This transaction creates a new debt obligation for FedEx Express, amounting to $970 million, which is guaranteed by the parent company, FedEx Corporation. While it is secured by specific assets, it represents a significant financial commitment with scheduled payments over the next 14 years.