8-KMaterial AgreementsFinancial EventsExhibits & Filings

FTAI Aviation Ltd. 8-K Report, Material Agreement (Apr 12, 2021)

Filed April 12, 2021For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced the successful closing of its private offering of $500.0 million aggregate principal amount of 5.50% senior unsecured notes due 2028. These notes represent a significant financing event for the company, with the proceeds earmarked for specific strategic purposes. A substantial portion will be used to redeem the company's outstanding 6.75% Senior Notes due 2022, indicating a proactive debt management strategy and potentially lower interest expense. The remaining proceeds are designated for general corporate purposes, including future acquisitions and investments, particularly within the aviation sector, suggesting an intention for strategic growth and expansion. The new notes are senior unsecured obligations, ranking equally with existing senior unsecured debt and senior to subordinated debt. However, they are effectively subordinated to secured debt and structurally subordinated to liabilities of non-guaranteeing subsidiaries. The indenture includes covenants that restrict the company and its subsidiaries from certain actions, such as incurring additional debt, encumbering assets, and making restricted payments, which aims to protect noteholders. In the event of a Change of Control, noteholders will have the right to demand repurchase at 101% of the principal amount.

Key Highlights

  • 1FTAI Aviation Ltd. closed a $500.0 million offering of 5.50% senior unsecured notes due 2028.
  • 2Proceeds will be used to redeem the outstanding 6.75% Senior Notes due 2022 at par.
  • 3Remaining proceeds are allocated for general corporate purposes, including potential acquisitions and aviation investments.
  • 4The notes are senior unsecured obligations, ranking equally with existing senior unsecured debt.
  • 5The indenture imposes covenants restricting debt incurrence, asset encumbrances, and restricted payments.
  • 6A Change of Control event triggers a repurchase option for noteholders at 101% of principal plus accrued interest.
  • 7The notes were issued in a private offering and are not registered under the Securities Act of 1933.

Frequently Asked Questions

The proceeds are primarily intended to redeem the company's outstanding 6.75% Senior Notes due 2022 at par, and the remainder will be used for general corporate purposes, which may include funding future acquisitions and investments, especially in the aviation sector.

The new notes bear an interest rate of 5.50% per annum, payable semi-annually, and will mature on May 1, 2028.

The notes are senior unsecured obligations of the company. They rank equally with existing and future senior unsecured indebtedness and senior to subordinated indebtedness. They are effectively subordinated to secured obligations and structurally subordinated to the liabilities of subsidiaries that do not guarantee the notes.

Yes, the Indenture includes covenants that limit the company and its restricted subsidiaries from actions such as incurring additional indebtedness, encumbering assets, and making restricted payments. Additionally, in the event of a Change of Control, noteholders have the right to require the company to repurchase their notes at 101% of the principal amount plus accrued interest.