FTAI Aviation Announces Increase to Previously Announced Cash Tender Offer for its 9.750% Senior Notes Due 2027
FTAI Aviation has increased its cash tender offer for the 9.750% Senior Notes due 2027 from $100 million to $300 million. The tender offer expires on July 2, 2024, unless extended or terminated earlier. Holders who tender by June 14, 2024, will receive an early tender payment of $30 per $1,000 principal amount. Otherwise, holders will receive $999 per $1,000 principal amount. The company will also pay accrued and unpaid interest from the last interest payment date to the settlement date. Key conditions for the offer include successful debt financing. J.P. Morgan Securities is the dealer manager for the tender offer.
- Increase in tender offer amount from $100 million to $300 million.
- Offer includes an early tender payment of $30 per $1,000 principal amount.
- Holders receive accrued and unpaid interest from the last interest payment date to the settlement date.
- FTAI Aviation has engaged J.P. Morgan Securities as the dealer manager.
- Tender offer is contingent on successful debt financing.
- Holders who tender after June 14, 2024, will not receive the early tender payment.
- If fully subscribed by June 14, 2024, later tenders will not be accepted.
- Unspecified terms of the new debt financing could introduce uncertainty.
Insights
FTAI Aviation's decision to increase the cash tender offer from $100 million to $300 million for its 9.750% Senior Notes due 2027 reflects a strategic move to manage its debt load proactively. This offer could signal the company's intent to enhance its balance sheet by reducing high-interest liabilities, potentially leading to lower interest expenses in the future.
The original offer's early tender payment of
For retail investors, this move can be seen as positive. By reducing debt with such high interest rates, FTAI Aviation might save on interest payments, potentially freeing up cash flow for other investments or returns to shareholders. However, this move also means the company is likely to incur some immediate cash outflow, which could temporarily impact liquidity. Investors should keep an eye on how the company plans to finance this tender offer and any subsequent impact on its cash reserves and financial health.
The increase in the tender offer for the 9.750% Senior Notes due 2027 is a notable event in the debt markets. This move indicates that FTAI Aviation is aiming to retire a significant portion of its high-yield debt. The notes, which carry a relatively high interest rate of 9.750%, represent a substantial cost to the company. By buying back these notes, FTAI Aviation can potentially lower its interest expenses and improve its overall debt profile.
From a debt market perspective, this strategy could be seen as a preemptive measure against future interest rate hikes, which could make refinancing more expensive. Moreover, the substantial increase in the tender offer cap from
For investors, particularly those holding these notes, the offer presents an opportunity to exit their positions at a premium, considering the
NEW YORK, June 03, 2024 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI), a Cayman Islands exempted company (the “Company” or “FTAI”) previously announced the commencement of a tender offer (the “Tender Offer”) by Fortress Transportation and Infrastructure Investors LLC (“FTAI LLC”), a wholly owned subsidiary of the Company, to purchase for cash up to
The Tender Offer will expire at 5:00 p.m., New York City time, on July 2, 2024 (the “Expiration Time”), unless extended or earlier terminated by FTAI LLC. FTAI LLC reserves the right to amend, extend or terminate the Tender Offer at any time subject to applicable law.
The following table sets forth certain terms of the Tender Offer:
| Series of Notes | CUSIP Number(1) | Aggregate Principal Amount Outstanding | Tender Cap | Total Consideration(2) | Early Tender Payment(2) | Tender Consideration(2) | |||||
Senior Notes due 2027 | 34960P AC5 (144A) U3458L AG6 (Reg S) | ||||||||||
(1) CUSIPs are provided for the convenience of Holders. No representation is made as to the correctness or accuracy of such numbers.
(2) Per
Each holder who validly tenders, and does not validly withdraw, its 2027 Notes on or prior to 5:00 p.m., New York City time, on June 14, 2024, unless extended (such date and time, as the same may be extended, the “Early Tender Deadline”) will be entitled to an early tender payment, which is included in the total consideration above, of
Holders validly tendering, and not validly withdrawing, 2027 Notes after the Early Tender Deadline and on or before the Expiration Time will be eligible to receive only the tender offer consideration, which represents the total consideration less the early tender payment.
In addition, holders whose 2027 Notes are accepted for payment in the Tender Offer will receive accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date for their 2027 Notes purchased pursuant to the Tender Offer. The 2027 Notes tendered prior to 5:00 p.m., New York City time, on June 14, 2024 (the “Withdrawal Deadline”), may be withdrawn at any time prior to the Withdrawal Deadline. 2027 Notes tendered after the Withdrawal Deadline may not be withdrawn. If the Tender Offer is fully subscribed as of the Early Tender Deadline, holders who validly tender 2027 Notes after the Early Tender Deadline will not have any of their 2027 Notes accepted for payment.
Subject to the satisfaction or waiver of certain conditions, FTAI LLC reserves the right, following the Early Tender Deadline, to accept for purchase prior to the Expiration Time all 2027 Notes validly tendered on or prior to the Early Tender Deadline (the “Early Settlement Election”). FTAI LLC will announce whether it intends to exercise the Early Settlement Election (the “Early Settlement Announcement”) following the Early Tender Deadline. If FTAI LLC exercises the Early Settlement Election, it will pay the total consideration promptly following the Early Settlement Announcement, which is currently expected to occur on June 18, 2024, subject to all conditions of the Tender Offer having been satisfied or waived by FTAI LLC (the “Early Settlement Date”), plus accrued and unpaid interest on the purchased 2027 Notes from the interest payment date for the 2027 Notes immediately preceding the Early Settlement Date to, but not including, the Early Settlement Date.
FTAI LLC’s obligation to accept for purchase, and to pay for, 2027 Notes validly tendered and not validly withdrawn pursuant to the Tender Offer is subject to the satisfaction or waiver of certain conditions, including, but not limited to, the condition that FTAI LLC shall have completed a debt financing on terms and conditions satisfactory to it (the “Financing Condition”). The complete terms and conditions of the Tender Offer are set forth in the Tender Offer documents that are being sent to holders of 2027 Notes. Holders of 2027 Notes are urged to read the Tender Offer documents carefully.
FTAI LLC has retained J.P. Morgan Securities LLC to act as dealer manager in connection with the Tender Offer. Questions about the Tender Offer may be directed to J.P. Morgan Securities LLC at (866) 834-4666 (toll-free) or (212) 834-7489 (collect). Copies of the Tender Offer documents and other related documents may be obtained from D.F. King & Co., Inc., the tender and information agent for the Tender Offer, at (212) 269-5550 (banks or brokers) or (toll free) (800) 290-6432 or by email at FTAI@dfking.com.
This press release amends the terms of the Offer to Purchase. To the extent that any terms in the Offer to Purchase are inconsistent with terms in this press release, the terms of this press release shall control. Other than as set forth herein, no other terms of the Tender Offer are being amended and there are no other changes to the terms of the Tender Offer set forth in the Offer to Purchase.
The Tender Offer is being made solely by means of the Tender Offer documents. Under no circumstances shall this press release constitute an offer to purchase or sell or the solicitation of an offer to purchase or sell the 2027 Notes or any other securities of FTAI LLC or any other person, nor shall there be any offer or sale of any 2027 Notes or other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In addition, nothing contained herein constitutes a notice of redemption of the 2027 Notes. No recommendation is made as to whether holders of the 2027 Notes should tender their 2027 Notes.
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 press 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
What is the new amount for FTAI Aviation's cash tender offer?
When does the tender offer for FTAI Aviation's 9.750% Senior Notes due 2027 expire?
What is the early tender payment for FTAI Aviation's Senior Notes due 2027?
What happens if the tender offer is fully subscribed by the early deadline?
Who is the dealer manager for FTAI Aviation's tender offer?
