FTAI Aviation Announces Expiration and Results of Cash Tender Offer for Any and All of Its Outstanding 6.50% Senior Notes Due 2025
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Insights
The tender offer by FTAI Aviation Ltd. to repurchase its 6.50% Senior Notes due 2025 represents a significant financial maneuver within the company's capital structure. This move could indicate a strategic effort to manage debt obligations and optimize the company's interest expense. By repurchasing these notes, FTAI is likely looking to take advantage of current market conditions to reduce its future interest payments, which could improve net income and cash flow in the medium to long term.
However, the repurchase of half of the outstanding principal amount suggests a partial rather than complete debt retirement. This strategy could reflect a balanced approach to maintaining liquidity while managing debt levels. Investors should monitor the company's leverage ratios post-transaction and the potential impact on credit ratings, as these factors can influence stock performance and investor sentiment.
The successful tendering of approximately 50% of the outstanding 2025 Senior Notes indicates a moderate level of investor willingness to sell back the debt to FTAI. This could be interpreted as a signal that debt holders view the offer as financially attractive or are seeking to reallocate their capital elsewhere. The 6.50% interest rate on the notes is relatively high in the current low-interest-rate environment and the repurchase could be seen as FTAI capitalizing on this discrepancy.
For the debt market, this tender offer might influence the pricing and demand for FTAI's remaining debt instruments. It's important for market participants to consider the implications for the company's debt profile and whether this action suggests a potential for future refinancing activities at lower interest rates.
The strategic move by FTAI to repurchase its high-yield debt before maturity may reflect broader industry trends where companies are actively managing their capital structures to reduce costs. In the aviation infrastructure sector, where FTAI operates, such financial decisions can be particularly impactful due to the capital-intensive nature of the industry and sensitivity to economic cycles.
The partial repurchase could also be interpreted as a signal of confidence by the management in the company's operational performance and future prospects. It suggests that FTAI is generating sufficient cash flow to manage such a buyback without compromising its operational capabilities. This action might be viewed positively by the market, potentially leading to a favorable reaction in the company's stock price.
NEW YORK, April 11, 2024 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI), a Cayman Islands exempted company (the “Company” or “FTAI”) is announcing today the expiration and results of Fortress Transportation and Infrastructure Investors LLC’s (“FTAI LLC”), a wholly owned subsidiary of the Company, offer to purchase for cash (the “Tender Offer”) any and all of the
The Tender Offer expired at 5:00 p.m., New York City time, on April 8, 2024 (such date and time, the "Expiration Date"). For holders who delivered a Notice of Guaranteed Delivery and all other required documentation at or prior to the Expiration Date, upon the terms and subject to the conditions set forth in the Offer to Purchase and Notice of Guaranteed Delivery, the deadline to validly tender 2025 Senior Notes using the guaranteed delivery procedures set forth in the Offer to Purchase (the "Guaranteed Delivery Procedures") was 5:00 p.m., New York City time, on April 10, 2024. The Settlement Date for the Offer is April 11, 2024 (the "Settlement Date").
According to the information received from D.F. King & Co., Inc., the Tender Agent and Information Agent for the Tender Offer, as of the Expiration Date,
| Series of Notes | CUSIP Number | Aggregate Principal Amount Outstanding | Aggregate Principal Amount Tendered and Accepted for Purchase | Tender Consideration(1) |
Senior Notes due 2025 | 34960P AB7 (144A) U3458L AD3 (Reg S) |
(1) Per
FTAI LLC plans to accept for purchase
In addition to the Tender Consideration, Holders whose 2025 Senior Notes are accepted for purchase will also receive a cash payment representing the accrued and unpaid interest on such 2025 Senior Notes from the last interest payment date up to, but not including, the Settlement Date. Interest will cease to accrue on the Settlement Date for all accepted 2025 Senior Notes, including those tendered through the Guaranteed Delivery Procedures.
Morgan Stanley & Co. LLC is acting as the sole Dealer Manager for the Tender Offer. D.F. King & Co., Inc. has been retained to serve as the Tender and Information Agent for the Tender Offer. Questions regarding the Tender Offer may be directed to Morgan Stanley & Co. LLC at: (800) 624-1808 (toll-free) or (212) 761-1057 (collect).
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, or an offer to purchase or a solicitation of an offer to sell any securities. Neither this press release nor the Offer to Purchase is an offer to sell or a solicitation of an offer to buy any securities. The Tender Offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law. In any jurisdiction in which the Tender Offer is required to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of FTAI LLC by the Dealer Manager, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
About FTAI Aviation Ltd.
FTAI owns and maintains commercial jet engines with a focus on CFM56 and V2500 engines. FTAI’s propriety portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations customer base. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control, and include, but are not limited to our ability to complete the offering of a new series of senior notes and our ability to complete the Tender Offer on the terms contemplated, or at all. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftaiaviation.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
For further information, please contact:
Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
Source: FTAI Aviation Ltd.
FAQ
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