8-KShareholder MattersExhibits & Filings

FTAI Aviation Ltd. 8-K Report, Rights Modification (Mar 15, 2023)

Filed March 15, 2023For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) has officially closed its public offering of 2,600,000 of its 9.500% Series D Fixed-Rate Reset Cumulative Perpetual Redeemable Preferred Shares, with an option for underwriters to purchase an additional 390,000 shares. The issuance of these Series D Preferred Shares, effective March 15, 2023, marks a significant capital raising event for the company. These preferred shares offer a fixed dividend of 9.500% annually until June 15, 2028, after which the rate will reset based on the Five-Year Treasury Rate plus a spread of 516.2 basis points. This reset feature provides a degree of protection against rising interest rate environments for investors, while the fixed rate offers predictability in the interim. From an investor's perspective, the Series D Preferred Shares rank senior to ordinary shares and pari passu with existing series of preferred shares regarding distributions and liquidation. The shares have no maturity date or mandatory redemption, existing indefinitely unless redeemed by FTAI. The company has the option to redeem these shares starting June 15, 2028, at $25.00 per share plus accrued dividends, with specific call provisions and premiums under certain circumstances, including Rating Events, Tax Redemption Events, and Change of Control scenarios. The inclusion of provisions for additional amounts to compensate for withholding taxes, as well as limited voting rights in specific default scenarios, are also key considerations for potential investors.

Key Highlights

  • 1FTAI Aviation Ltd. successfully closed its registered public offering of 2,600,000 9.500% Series D Fixed-Rate Reset Cumulative Perpetual Redeemable Preferred Shares.
  • 2The Series D Preferred Shares will pay a fixed quarterly cumulative cash distribution of 9.500% per annum until June 15, 2028 (the First Reset Date).
  • 3After June 15, 2028, the distribution rate will reset every five years to the Five-Year Treasury Rate plus a spread of 516.2 basis points.
  • 4These Series D Preferred Shares rank senior to FTAI's ordinary shares and pari passu with its existing Series A, B, and C preferred shares.
  • 5FTAI has the option to redeem the Series D Preferred Shares on or after June 15, 2028, at $25.00 per share plus accumulated distributions.
  • 6Special redemption provisions exist for Rating Events (at $25.50), Tax Redemption Events (at $25.00), and Change of Control events (at $25.25 prior to June 15, 2028).
  • 7The Series D Preferred Shares have no stated maturity, sinking fund, or mandatory redemption, and are intended to remain outstanding indefinitely unless redeemed by the Company.

Frequently Asked Questions

The Series D Preferred Shares will pay a fixed quarterly cumulative cash distribution at a rate of 9.500% per annum from March 15, 2023, until June 15, 2028. After this date, the distribution rate will reset every five years based on the Five-Year Treasury Rate plus a spread of 516.2 basis points.

FTAI can redeem the Series D Preferred Shares on or after June 15, 2028, at its option, at a price of $25.00 per share, plus any accumulated unpaid distributions. There are also special redemption provisions, including an early redemption at $25.50 per share within 120 days after a Rating Event, at $25.00 per share upon a Series D Preferred Share Tax Redemption Event, and at $25.25 per share within 60 days after a Change of Control event (if occurring before June 15, 2028).

Generally, holders of Series D Preferred Shares have no voting rights. However, they will gain limited voting rights if the Company fails to pay dividends for six or more quarterly periods (whether consecutive or not) or under certain other specific circumstances outlined in the Share Designation.

The Series D Preferred Shares rank senior and prior to FTAI's ordinary shares. They rank equally (pari passu) with FTAI's existing 8.25% Series A, 8.00% Series B, and 8.25% Series C Cumulative Perpetual Redeemable Preferred Shares, with respect to the payment of distributions and rights upon liquidation, dissolution, or winding up of the Company.