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FTAI Aviation Ltd. 8-K Report, Material Agreement (Sep 12, 2019)

Filed September 12, 2019For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI), formerly Fortress Transportation and Infrastructure Investors LLC, announced the successful closing of its registered public offering of 3,000,000 8.25% Series A Fixed-to-Floating Rate Cumulative Perpetual Redeemable Preferred Shares on September 12, 2019. An additional 450,000 shares were issued due to the underwriters exercising their over-allotment option in full. The issuance of these preferred shares involved the amendment and restatement of the company's LLC agreement to include a Share Designation that outlines the terms and conditions for these securities. Key features of the Series A Preferred Shares include a fixed dividend rate of 8.25% annually until September 15, 2024, after which it converts to a floating rate based on Three-Month LIBOR plus a 688.6 basis point spread. These shares rank senior to common shares in terms of distributions and liquidation. The company has redemption options under specific circumstances, including on or after September 15, 2024, at $25.00 per share plus accrued distributions, and potentially earlier redemption at slightly higher prices under rating event, tax event, or change of control scenarios. The shares have no stated maturity and carry limited voting rights for holders, unless certain dividend payment failures occur.

Key Highlights

  • 1FTAI Aviation Ltd. successfully closed a public offering of 8.25% Series A Preferred Shares on September 12, 2019.
  • 2The offering included an exercise of the full over-allotment option, bringing the total issued shares to up to 3,450,000.
  • 3Series A Preferred Shares will pay a fixed cumulative dividend of 8.25% per annum until September 15, 2024.
  • 4From September 15, 2024, the dividend rate will become floating, tied to Three-Month LIBOR plus a 688.6 basis point spread.
  • 5The Series A Preferred Shares rank senior to the company's common shares regarding distributions and liquidation preferences.
  • 6FTAI has the option to redeem the Series A Preferred Shares on or after September 15, 2024, at $25.00 per share plus accrued dividends.
  • 7Early redemption is possible under specific conditions such as a Rating Event, Tax Redemption Event, or Change of Control, with varied redemption prices and timelines.

Frequently Asked Questions

This 8-K filing primarily announces the closing of FTAI Aviation Ltd.'s public offering of its 8.25% Series A Fixed-to-Floating Rate Cumulative Perpetual Redeemable Preferred Shares and details the material modifications to the rights of security holders related to these new shares, including their terms, dividend structure, and redemption provisions.

The Series A Preferred Shares will pay quarterly cumulative cash distributions. From the issuance date (September 12, 2019) until September 15, 2024, the dividend rate is fixed at 8.25% per annum. After September 15, 2024, the rate will float, equal to the Three-Month LIBOR plus a spread of 688.6 basis points (6.886%).

FTAI can redeem the Series A Preferred Shares on or after September 15, 2024, at $25.00 per share plus any accumulated unpaid distributions. Additionally, the company has the option to redeem them earlier (prior to September 15, 2024) under specific events: at $25.50 per share within 120 days after a Rating Event, at $25.25 per share within 60 days after a Tax Redemption Event, or at $25.25 per share within 60 days after a Change of Control. A Change of Control also triggers a potential 5.00% increase in the distribution rate if redemption is not initiated.

Generally, holders of Series A Preferred Shares have no voting rights. However, they gain limited voting rights if the company fails to pay dividends for six or more quarterly periods (whether consecutive or not), and under certain other specific circumstances outlined in the Share Designation.