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FTAI Aviation Ltd. 8-K Report, Material Agreement (Mar 25, 2021)

Filed March 25, 2021For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) reported on March 25, 2021, the closing of its registered public offering of 4,200,000 Series C Fixed-Rate Reset Cumulative Perpetual Redeemable Preferred Shares. The offering, which included the full exercise of an over-allotment option, raised capital through the issuance of preferred shares with a stated dividend rate of 8.25% per annum until June 15, 2026. Following this date, the dividend rate will reset based on the Five-Year Treasury Rate plus a spread of 737.8 basis points. This filing details the terms and conditions of these Series C Preferred Shares, including their ranking senior to common shares and pari passu with existing Series A and B preferred shares concerning distributions and liquidation. The company has the option to redeem these shares under various conditions, including on or after June 15, 2026, or under specific circumstances such as a Rating Event, Tax Redemption Event, or Change of Control, often with a premium. The Series C Preferred Shares have no maturity date and limited voting rights, unless dividend payments are missed for an extended period.

Key Highlights

  • 1FTAI Aviation Ltd. successfully closed a public offering of 4,200,000 Series C Fixed-Rate Reset Cumulative Perpetual Redeemable Preferred Shares.
  • 2The offering generated capital through the issuance of preferred stock at an initial rate of 8.25% per annum.
  • 3The dividend rate for Series C Preferred Shares will reset on June 15, 2026, to the Five-Year Treasury Rate plus 737.8 basis points.
  • 4Series C Preferred Shares rank senior to common stock and pari passu with existing Series A and B preferred shares.
  • 5The company has optional redemption rights for Series C Preferred Shares, including at a premium under specific trigger events like Change of Control or Tax Redemption Events.
  • 6These preferred shares have no stated maturity date and are perpetual unless redeemed or repurchased.
  • 7Holders of Series C Preferred Shares have limited voting rights, which can expand under certain conditions, such as missed dividend payments.

Frequently Asked Questions

The Series C Preferred Shares initially pay a quarterly cumulative cash distribution at a rate of 8.25% per annum from March 25, 2021, to June 15, 2026. After June 15, 2026, the dividend rate will reset and be based on the Five-Year Treasury Rate plus a spread of 737.8 basis points per annum.

The company can redeem the Series C Preferred Shares on or after June 15, 2026, at $25.00 per share plus accumulated unpaid distributions. Additionally, the company has optional redemption rights prior to June 15, 2026, under specific circumstances: at $25.50 per share following a Rating Event, at $25.25 per share following a Tax Redemption Event, or at $25.25 per share following a Change of Control, all plus accumulated unpaid distributions.

No, the Series C Preferred Shares have no stated maturity date, are not subject to any sinking fund, and will remain outstanding indefinitely unless repurchased or redeemed by the Company.

Generally, holders of Series C Preferred Shares have no voting rights. However, they gain limited voting rights if the company fails to pay dividends for six or more quarterly distribution periods (consecutive or not) and under certain other specified circumstances.