Summary
FTAI Aviation Ltd. (FTAI) announced a significant amendment to its credit agreement, establishing a new $225 million Revolving Credit Facility. This facility, secured by capital stock of certain subsidiaries and guaranteed by relevant parties, will mature on September 20, 2025. The proceeds are earmarked for working capital and general corporate purposes, including permitted acquisitions and investments. The amendment also allows for up to $25 million in letters of credit for similar purposes. The updated credit agreement introduces specific interest rate structures based on Adjusted Term SOFR Rate or Base Rate, plus applicable margins. It also includes a quarterly commitment fee of 0.50% on unused portions of the facility, alongside customary letter of credit and agency fees. The amendment contains standard covenants concerning financial reporting, business conduct, and asset maintenance, alongside restrictions on debt incurrence, asset encumbrances, and restricted payments, with particular attention to aviation assets. Financial covenants require specific ratios for aviation asset value to facility commitments and debt to EBITDA, indicating a focus on maintaining asset coverage and controlling leverage.
Key Highlights
- 1Establishment of a new $225 million Revolving Credit Facility maturing September 20, 2025.
- 2Proceeds to be used for working capital, general corporate purposes, and permitted acquisitions/investments.
- 3Facility includes a $25 million sub-limit for letters of credit.
- 4Interest rates are based on Adjusted Term SOFR Rate or Base Rate plus specified margins.
- 5Quarterly commitment fee of 0.50% on unused facility amounts.
- 6Key financial covenants include a minimum aviation asset value to commitment ratio of 3.00:1.00 and a maximum debt-to-EBITDA ratio (initially 5.00:1.00, tightening to 4.00:1.00 thereafter).
- 7Amendment includes customary affirmative, negative, and default covenants, with specific restrictions related to aviation assets.