Summary
FTAI Aviation Ltd. (FTAI) filed an 8-K on November 27, 2019, reporting the closing of a public offering for 4,000,000 of its 8.00% Series B Fixed-to-Floating Rate Cumulative Perpetual Redeemable Preferred Shares, with an additional 600,000 shares issued under an over-allotment option. This offering was completed through an underwriting agreement with multiple major investment banks. The issuance of these preferred shares necessitated an amendment to the company's operating agreement to include a Share Designation specifically for the Series B Preferred Shares.
Key Highlights
- 1FTAI Aviation Ltd. successfully closed a public offering of 4,000,000 (plus 600,000 over-allotment) Series B Preferred Shares on November 27, 2019.
- 2The Series B Preferred Shares carry a fixed dividend rate of 8.00% per annum until December 15, 2024.
- 3Post-December 15, 2024, the dividend rate will convert to a floating rate of Three-Month LIBOR plus 644.7 basis points (6.447%).
- 4These Series B Preferred Shares rank senior to common shares and pari passu with Series A Preferred Shares in terms of distributions and liquidation preference.
- 5The company has redemption options for the Series B Preferred Shares beginning on or after December 15, 2024, at $25.00 per share plus accrued dividends.
- 6Special redemption provisions exist for events like a Rating Event (at $25.50 per share), Tax Redemption Event ($25.25 per share), or Change of Control ($25.25 per share), all prior to December 15, 2024, under specific conditions.
- 7The Series B Preferred Shares have no stated maturity, sinking fund, or mandatory redemption, and holders generally have limited voting rights unless dividend payments are missed for six or more periods.
Frequently Asked Questions
This 8-K filing announces the closing of a registered public offering of FTAI Aviation Ltd.'s 8.00% Series B Fixed-to-Floating Rate Cumulative Perpetual Redeemable Preferred Shares and details the terms of these shares as outlined in the Share Designation within the company's amended operating agreement.
The Series B Preferred Shares will pay cumulative cash distributions at a fixed rate of 8.00% per annum from November 27, 2019, to December 15, 2024. After this date, the rate will become floating, equal to Three-Month LIBOR plus a spread of 644.7 basis points.
FTAI can redeem the Series B Preferred Shares in whole or in part on or after December 15, 2024, at $25.00 per share plus accrued dividends. There are also provisions allowing redemption prior to this date under specific circumstances such as a Rating Event, Tax Redemption Event, or Change of Control, at slightly different redemption prices.
Holders of Series B Preferred Shares generally do not have voting rights. However, they gain limited voting rights if the company fails to pay dividends for six or more quarterly periods or under certain other specific circumstances outlined in the Share Designation.