8-KOther EventsExhibits & Filings

FTAI Aviation Ltd. 8-K Report, Corporate Update (Jun 30, 2020)

Filed June 30, 2020For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced on June 30, 2020, the establishment of an At-the-Market (ATM) equity offering program. The company has entered into a Sales Agreement with B. Riley FBR, Inc. to sell up to $100 million of its Series A and Series B preferred shares from time to time. This program provides FTAI with flexibility to raise capital opportunistically through the issuance of these preferred shares in the open market. The net proceeds from any sales under this ATM program are intended for general corporate purposes, including potential future acquisitions and investments, with a specific mention of aviation investments. This initiative suggests that FTAI is positioning itself to capitalize on market opportunities by having readily available funding mechanisms. Investors should note the potential for share dilution and the ongoing nature of capital raising activities through this program.

Key Highlights

  • 1FTAI Aviation Ltd. has launched an At-the-Market (ATM) equity offering program, allowing for the sale of preferred shares over time.
  • 2The program aims to raise up to $100 million through the sale of 8.25% Series A and 8.00% Series B Cumulative Perpetual Redeemable Preferred Shares.
  • 3Sales will be conducted by B. Riley FBR, Inc. as either sales agent or principal.
  • 4The company has the flexibility to suspend or terminate the program at any time.
  • 5Proceeds are designated for general corporate purposes, including potential acquisitions and investments, particularly in aviation.
  • 6The offering is made under an effective shelf registration statement and a prospectus supplement filed on June 30, 2020.
  • 7B. Riley FBR, Inc. will receive compensation of up to 1.5% of gross proceeds from sales.

Frequently Asked Questions

An At-the-Market (ATM) offering program allows a company to sell its equity securities (in this case, preferred shares) into the open market over a period of time, at prevailing market prices. This provides flexibility for raising capital as needed, rather than conducting a large, one-time offering.

The Series A shares are 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares, and the Series B shares are 8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares. These are perpetual preferred stock with fixed dividend rates initially, which can convert to floating rates. They are cumulative, meaning unpaid dividends accrue, and redeemable at the company's discretion.

The net proceeds from the sale of ATM Shares are intended for general corporate purposes. This may include funding future acquisitions and investments, with a specific mention of aviation investments. This indicates FTAI is looking for growth opportunities.

The ATM program allows FTAI to issue new shares, which can lead to dilution for existing common shareholders. However, the issuance is of preferred stock, which has a different claim on assets and earnings than common stock. The amount of dilution will depend on how many preferred shares are ultimately sold under the program.