8-KMaterial AgreementsFinancial EventsExhibits & Filings

FTAI Aviation Ltd. 8-K Report, Material Agreement (Jul 7, 2022)

Filed July 7, 2022For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced the closing of a private offering by its subsidiary, FTAI Infrastructure LLC, of $450.0 million in 10.500% senior secured notes due 2027. The offering was conducted at a discount, priced at 94.585% of par value. These notes are a crucial component of the Company's planned spin-off of its infrastructure business into a new entity, FTAI Infrastructure Inc. The net proceeds from this offering will be distributed to the parent company, FTAI, a portion of which is earmarked for repaying existing indebtedness. The transaction structure involves an escrow entity initially, which will be merged into the new public company post-spin-off, with FTAI Infrastructure Inc. becoming the primary issuer of the notes. The notes will be secured by substantially all assets of FTAI Infrastructure and its guarantors following the spin-off, ranking pari passu with other senior secured obligations. However, prior to the spin-off, the notes are secured only by funds in an escrow account, with a mandatory redemption clause if the spin-off does not occur by September 10, 2022.

Key Highlights

  • 1FTAI Infrastructure LLC closed a private offering of $450.0 million aggregate principal amount of 10.500% senior secured notes due 2027.
  • 2The notes were issued at a discount of 94.585% of the principal amount, plus accrued interest.
  • 3Proceeds from the offering are intended to fund the proposed spin-off of FTAI's infrastructure business into FTAI Infrastructure Inc.
  • 4A portion of the net proceeds will be used by the parent company, FTAI, to repay outstanding indebtedness.
  • 5The notes will be guaranteed by FTAI Infrastructure's subsidiaries (excluding Excluded Subsidiaries) post-spin-off.
  • 6Post-spin-off, the notes will be secured by a first-priority lien on substantially all tangible and intangible assets of FTAI Infrastructure and its guarantors.
  • 7A mandatory redemption will occur if the spin-off is not completed by September 10, 2022.

Frequently Asked Questions

The primary purpose of the note offering is to finance the upcoming spin-off of FTAI's infrastructure business into a new, publicly traded entity named FTAI Infrastructure Inc. The proceeds will support this separation and potentially allow the parent company, FTAI, to reduce its existing debt.

The notes carry a coupon rate of 10.500% per annum, payable semi-annually, and they mature on June 1, 2027.

If the spin-off is not consummated by September 10, 2022, the issuer (FTAI Infra Escrow Holdings, LLC) is required to redeem all of the notes at 100% of their initial issue price, plus accrued interest. This provides a backstop for noteholders.

Following the spin-off, the notes will be senior secured obligations, backed by a first-priority lien on substantially all tangible and intangible assets of FTAI Infrastructure Inc. and its guarantors, ranking equally with other future senior secured obligations.