8-KRegulation FD

FTAI Aviation Ltd. 8-K Report, Regulation FD Disclosure (Jul 27, 2021)

Filed July 27, 2021For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) is announcing a significant development related to its subsidiary, Jefferson Energy companies. Jefferson intends to offer approximately $425 million in Series 2021 Bonds to finance the development and construction of new facilities. These bonds are split into Series 2021A Dock and Wharf Facility Revenue Bonds ($225 million) and Series 2021B Taxable Facility Revenue Bonds ($200 million). The proceeds will also be used to refinance certain subordinated debt owed to FTAI and fund reserve accounts, supported by an expected $90 million equity investment from FTAI into Jefferson. These new facilities are projected to generate substantial revenue and EBITDA. Jefferson anticipates annual run-rate revenues of approximately $170 million and run-rate EBITDA of approximately $100 million within twelve months of project completion (expected by the first half of 2023). These projections are based on an assumed 90% utilization rate of 6.2 million barrels of storage capacity at market-competitive rates. Investors should note that these are forward-looking projections and are subject to various risks and uncertainties, including project completion, utilization rates, and market conditions. The bonds are being offered only to qualified institutional buyers and institutional accredited investors.

Key Highlights

  • 1Jefferson, a subsidiary of FTAI, plans to issue approximately $425 million in Series 2021 Bonds to fund new facility development and construction.
  • 2The bond offering consists of $225 million in Series 2021A Dock and Wharf Facility Revenue Bonds and $200 million in Series 2021B Taxable Facility Revenue Bonds.
  • 3Proceeds will also be used to refinance existing debt owed by Jefferson to FTAI and to fund reserve accounts, supported by a $90 million equity injection from FTAI.
  • 4Projected annual run-rate revenues for the new facilities are approximately $170 million, with projected annual run-rate EBITDA of approximately $100 million.
  • 5These revenue and EBITDA projections are based on an anticipated 90% utilization of 6.2 million barrels of storage capacity, with completion expected by the first half of 2023.
  • 6The Series 2021 Bonds are special, limited obligations secured solely by the pledged collateral and do not constitute indebtedness of any governmental entities involved.
  • 7The offering is limited to "qualified institutional buyers" and "institutional accredited investors" under specific SEC rules.

Frequently Asked Questions

The primary purpose is to finance the development, construction, and acquisition of new facilities. Additionally, proceeds will be used to refinance certain subordinated debt owed to FTAI and to fund reserve and interest accounts, supported by an equity investment from FTAI.

Jefferson projects that within twelve months of completion (expected by the first half of 2023), the new facilities will achieve an annual run-rate revenue of approximately $170 million and an annual run-rate EBITDA of approximately $100 million. These figures assume approximately 6.2 million barrels of storage capacity and a 90% utilization rate.

FTAI is the parent company of Jefferson. FTAI will receive proceeds from the bond issuance to repay subordinated debt owed to it by Jefferson. Furthermore, FTAI is expected to make a $90 million equity investment in Jefferson to help fund reserve and interest accounts related to the project.

No, the Series 2021 Bonds are special, limited obligations of the issuing authorities. They are payable solely from the pledged collateral and do not constitute indebtedness or a pecuniary liability of The Port of Beaumont Navigation District, The Port of Beaumont Industrial Development Authority, or any other political subdivision of the State of Texas. The full faith and credit of these entities are not pledged to the bonds.