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FTAI Aviation Ltd. 8-K Report, Material Agreement (Jun 17, 2024)

Filed June 17, 2024For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) announced on June 17, 2024, the issuance of $800.0 million in 7.000% Senior Notes due 2032. This significant debt offering was made to qualified institutional buyers and certain non-U.S. persons. The net proceeds are earmarked for several key financial activities, including repaying amounts outstanding under its revolving credit facility, funding the cash termination fee for its previously announced management internalization, and making a partial repurchase of its 9.750% Senior Notes due 2027 through a tender offer, capped at $300.0 million. The issuance of these new notes represents a strategic move to refinance existing debt and manage its capital structure. The company will also use the proceeds for general corporate purposes, potentially including further debt reduction. The new notes are senior unsecured obligations of the Issuer, guaranteed by FTAI Aviation Ltd., and rank equally with existing senior unsecured debt. The company has also amended its tender offer for the 2027 notes, extending the early tender period and the final expiration date, demonstrating active management of its outstanding liabilities.

Key Highlights

  • 1FTAI Aviation Ltd. issued $800.0 million of 7.000% Senior Notes due 2032.
  • 2Proceeds will be used to repay revolving credit facility, fund management internalization termination fee, and repurchase 2027 Senior Notes.
  • 3The tender offer for the 9.750% Senior Notes due 2027 has been extended.
  • 4The repurchase of 2027 notes in the tender offer is capped at $300.0 million aggregate principal amount.
  • 5The new Senior Notes due 2032 are senior unsecured obligations of the Issuer, fully and unconditionally guaranteed by FTAI Aviation Ltd.
  • 6The Indenture governing the new notes includes restrictive covenants limiting certain corporate actions.
  • 7The notes were offered to qualified institutional buyers (Rule 144A) and non-U.S. persons (Regulation S).

Frequently Asked Questions

The primary purposes are to repay outstanding amounts under the revolving credit facility, fund the cash termination fee associated with the management internalization, and repurchase up to $300 million of the company's 9.750% Senior Notes due 2027 through a tender offer. Remaining proceeds may be used for general corporate purposes, including further debt repayment.

The new notes are senior unsecured obligations of the Issuer and rank equally in right of payment with all other existing and future senior unsecured indebtedness of the Issuer. They are senior to future subordinated indebtedness. However, they are effectively subordinated to secured obligations to the extent of the collateral value and structurally subordinated to liabilities of subsidiaries that do not guarantee the notes. FTAI Aviation Ltd. provides a full and unconditional guarantee on a senior unsecured basis.

The company has amended the tender offer, extending the early tender period to June 18, 2024, and the final expiration time for the tender offer to July 5, 2024. This provides holders with additional time to tender their existing 9.750% Senior Notes due 2027 for repurchase.

The new Senior Notes due 2032 bear interest at a rate of 7.000% per annum, payable semi-annually. The maturity date for these notes is June 15, 2032.