8-KMaterial AgreementsFinancial EventsExhibits & Filings

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

Filed December 8, 2021For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced a significant update regarding its financing structure through the entry into an Amended and Restated Credit Agreement (A&R Credit Agreement) and a new Credit Agreement for Bridge Loans. The A&R Credit Agreement provides a $250 million revolving credit facility maturing in December 2024, primarily for working capital and general corporate purposes, including permitted acquisitions. This facility is secured by capital stock of certain subsidiaries and has covenants tied to aviation asset value and debt-to-equity ratios. Concurrently, FTAI secured a $350 million senior secured bridge term loan facility, maturing in December 2024, specifically to finance aviation asset acquisitions from ITA and Avianca. This bridge facility also carries covenants related to capital expenditures, loan-to-value ratios on financed assets, and debt-to-equity. The company also plans to issue debt securities to repay these bridge loans 180 days after the closing date, indicating a short-term financing strategy for these acquisitions.

Key Highlights

  • 1FTAI entered into an Amended and Restated Credit Agreement providing a $250 million revolving credit facility maturing on December 2, 2024, for working capital and general corporate purposes.
  • 2A new $350 million senior secured bridge term loan facility has been established to finance the acquisition of specified aviation assets from ITA and Avianca.
  • 3The revolving credit facility bears interest at Adjusted Term SOFR + 3.00% or Base Rate + 2.00%, with a 0.50% commitment fee on unused portions.
  • 4The bridge loans bear interest at Adjusted Term SOFR + 2.75% or Base Rate + 1.75%, with potential additional fees if outstanding beyond 90 days.
  • 5Both credit agreements include customary affirmative and negative covenants, along with financial covenants such as minimum aviation asset value to credit facility ratio (3:1 for A&R) and maximum debt-to-equity ratio (3:1 for both).
  • 6The bridge loan agreement includes a specific covenant limiting capital expenditures to $300 million (with exceptions) and a maximum loan-to-value ratio of 0.70 to 1.00 for financed aviation assets.
  • 7FTAI is obligated to issue debt securities within 180 days post-closing to repay outstanding bridge loans, with penalties if not met.

Frequently Asked Questions

The $250 million Amended and Restated Credit Agreement is primarily for working capital and other general corporate purposes, including permitted acquisitions and other investments. The $350 million Bridge Loan Agreement is specifically intended to finance or refinance the acquisition of specified aviation assets from ITA and Avianca.

Both the Amended and Restated Revolving Credit Facility and the Bridge Loan Agreement mature on December 2, 2024, and December 1, 2024, respectively.

The Amended and Restated Credit Agreement requires a minimum ratio of appraised aviation asset value to aggregate commitments of 3.00:1.00 and a maximum debt-to-total equity ratio of 3.00:1.00. The Bridge Loan Agreement includes a capital expenditure limit (over $300 million aggregate, with exceptions), a maximum loan-to-value ratio of 0.70:1.00 on financed aviation assets, and a maximum debt-to-total equity ratio of 3.00:1.00.

FTAI has agreed to issue certain debt securities within 180 days after the closing date, with the proceeds intended to repay any outstanding bridge loans. Failure to do so will result in the company owing certain fees and other amounts to the lenders.