8-KMaterial AgreementsFinancial EventsExhibits & Filings

FTAI Aviation Ltd. 8-K Report, Material Agreement (Mar 15, 2017)

Filed March 15, 2017For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced on March 15, 2017, the closing of its offering of $250 million aggregate principal amount of 6.75% senior unsecured notes due 2022. These notes are unsecured obligations of the company, ranking equally with existing and future senior unsecured debt, but effectively subordinate to any secured debt and structurally subordinate to any subsidiaries that do not guarantee the notes. The net proceeds from this offering are intended to fully repay approximately $100 million of outstanding indebtedness under the company's credit agreement, cover related fees and expenses, and fund future investments and general corporate purposes. In conjunction with this debt issuance, FTAI has terminated its previous credit agreement dated January 23, 2017, having prepaid the outstanding term loans. The indenture governing the new notes imposes various covenants, limiting the company and its restricted subsidiaries from incurring additional debt, encumbering assets, or making restricted payments, subject to certain exceptions. Holders of these notes have the right to require repurchase at 101% of principal plus accrued interest in the event of a Change of Control. The company retains the option to redeem the notes under specific conditions and prices starting from March 15, 2020, with provisions for early redemption using proceeds from equity offerings.

Key Highlights

  • 1FTAI Aviation Ltd. successfully closed a $250 million offering of 6.75% senior unsecured notes due 2022.
  • 2The proceeds will be used to repay $100 million of existing credit facility debt, cover expenses, and fund general corporate purposes and future investments.
  • 3The new notes are senior unsecured obligations, ranking equally with other senior unsecured debt but subordinate to secured debt.
  • 4The indenture includes covenants restricting indebtedness, asset encumbrances, and restricted payments.
  • 5A 'Change of Control' event triggers a repurchase option for noteholders at 101% of principal plus accrued interest.
  • 6The company has the option to redeem the notes starting March 15, 2020, with specified redemption prices and conditions, including limited early redemption using equity proceeds.
  • 7The existing credit agreement dated January 23, 2017, has been terminated following the full repayment of its outstanding term loans.

Frequently Asked Questions

This 8-K filing announces the closing of FTAI Aviation Ltd.'s $250 million offering of senior unsecured notes due 2022 and the termination of its prior credit agreement.

The net proceeds are designated for the full repayment of approximately $100 million in outstanding credit facility debt, associated fees and expenses, and for general corporate purposes including future investments.

The notes are senior unsecured obligations. This means they rank equally with other senior unsecured debt but are effectively subordinated to any secured debt of the company, as well as structurally subordinated to the debt of any subsidiaries that do not guarantee these notes.

Yes, the indenture imposes limitations on FTAI and its restricted subsidiaries regarding the incurrence of indebtedness, pledging assets, making restricted payments, and other financial covenants, subject to specified qualifications.