| Item 1.01 |
Entry into a Material Definitive Agreement.
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Offering of Additional Notes
On July 25, 2022, FTAI Infrastructure LLC, a Delaware limited liability company (“FTAI Infrastructure”), and a subsidiary of Fortress Transportation and Infrastructure
Investors LLC (the “Company”), closed its previously announced private offering of an additional $50.0 million aggregate principal amount of 10.500% senior secured notes due 2027 (the “Additional Notes”), at an issue price equal to 94.585% of
principal, plus accrued interest from and including July 7, 2022. The Additional Notes were issued pursuant to an indenture, dated as of July 7, 2022 (the “Base Indenture”), between the Escrow Issuer (as defined below) and U.S. Bank Trust Company,
National Association, as trustee (the “Trustee”) and notes collateral agent, as supplemented by the First Supplemental Indenture, dated as of July 25, 2022 (the “First Supplemental Indenture”; the Base Indenture as so supplemented, the
“Indenture”). The Company is filing the First Supplemental Indenture as Exhibit 4.1 to this Current Report on Form 8-K, which is incorporated by reference herein.
The original 10.500% senior secured notes due 2027 were issued in an aggregate principal amount of $450.0 million on July 7, 2022 (the “Original Notes”, together with
the Additional Notes, the “Notes”). After giving effect to the issuance of the Additional Notes, there are $500.0 million of Notes outstanding as of the date hereof. The Additional Notes and the Original Notes have identical terms, other than with
respect to the date of issuance, and will be treated as a single class for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase. For a description of the terms of the Indenture and the Notes, see the
Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 7, 2022, with respect to the Base Indenture and the Original Notes.
The offering was made in connection with the proposed distribution by the Company of all of the outstanding shares of common stock of FTAI Infrastructure Inc. (the
“spin-off”). Prior to the consummation of the spin-off, FTAI Infrastructure will convert to a Delaware corporation and will change its name to FTAI Infrastructure Inc. The Additional Notes were initially issued through a subsidiary of FTAI
Infrastructure, FTAI Infra Escrow Holdings, LLC, a Delaware limited liability company (the “Escrow Issuer”). Upon consummation of the spin-off, the Escrow Issuer will be merged with and into FTAI Infrastructure Inc. and FTAI Infrastructure Inc.
will become the issuer of the Additional Notes. Following the spin-off, FTAI Infrastructure Inc. will hold, directly or indirectly, all of the Company’s infrastructure business. FTAI Infrastructure Inc. intends to distribute the net proceeds from
the offering to the Company in connection with the spin-off. The Company intends to use a portion of such net proceeds from the offering to repay certain of its outstanding indebtedness.
Prior to the spin-off, the Notes will not be guaranteed and will be secured solely by funds held in the segregated escrow account until the release of the funds from
the escrow account in connection with the spin-off or the Notes are otherwise required to be redeemed pursuant to their terms and the terms of the amended and restated escrow agreement, dated as of July 25, 2022, among U.S. Bank Trust Company,
National Association, as escrow agent and securities intermediary, U.S. Bank Trust Company, National Association, as trustee, and the Escrow Issuer. If, among other things, the spin-off is not consummated by September 10, 2022, the Escrow Issuer
will be required to redeem all of the Notes on the Special Mandatory Redemption Date (as defined in the Indenture) in accordance with the terms of the Indenture at a redemption price equal to 100% of the initial issue price of the Notes, plus
accrued and unpaid interest from the issue date, to, but excluding, the Special Mandatory Redemption Date.
Following the spin-off, the obligations of FTAI Infrastructure pursuant to the Notes will be unconditionally guaranteed, jointly and severally, by all of the
subsidiaries of FTAI Infrastructure other than Excluded Subsidiaries (as defined in the Indenture) (collectively, the “guarantors”), which such Excluded Subsidiaries, following the spin-off, will constitute all of the subsidiaries of FTAI
Infrastructure other than the subsidiaries comprising the Transtar business.
Following the spin-off, the Notes will (1) be the senior obligations of FTAI Infrastructure and the guarantors and secured, subject to permitted liens and certain
other exceptions, by a first-priority lien on substantially all tangible and intangible assets of FTAI Infrastructure and the guarantors on an equal and ratable basis with all future senior secured obligations of FTAI Infrastructure and the
applicable guarantor that constitute Equal Priority Obligations (as defined in the Indenture), (2) be effectively senior to our and our guarantors’ existing and future debt that is not secured by the Collateral (as defined in the Indenture), to the
extent of the value of the Collateral, and (3) rank (i) equal in right of payment with all existing and future senior indebtedness of FTAI Infrastructure or the applicable guarantor, as the case may be, (ii) senior in right of payment to all
existing and future subordinated indebtedness of FTAI Infrastructure and the guarantors, (iii) effectively senior to all existing and future unsecured indebtedness and indebtedness that is not secured by the Collateral of FTAI Infrastructure and
the applicable guarantor, to the extent of the value of the Collateral (after giving effect to the sharing of such value with holders of equal or prior ranking liens on the Collateral), (iv) effectively junior to all indebtedness of FTAI
Infrastructure and the guarantors secured by assets that are not Collateral to the extent of the value of such assets, (v) equal to all existing and future indebtedness of FTAI Infrastructure and the guarantors that is secured by the Collateral on
a first-priority basis, to the extent of the value of the Collateral and (vi) structurally subordinated to all holders of indebtedness, other liabilities (including trade creditors) and preferred stock of our non-guarantor subsidiaries and
unconsolidated entities.
The Notes will bear interest at a rate of 10.500% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2022, to
persons who are holders of record of the Notes on the immediately preceding May 15 and November 15, respectively.
The Indenture limits the ability of FTAI Infrastructure and its restricted subsidiaries to, among other things, incur indebtedness, encumber their assets, make
restricted payments, create dividend restrictions and other payment restrictions that affect FTAI Infrastructure’s restricted subsidiaries, permit certain subsidiaries to incur or guarantee certain indebtedness, enter into transactions with
affiliates and sell assets, in each case subject to certain qualifications and exceptions set forth in the Indenture.
In the event of a Change of Control (as defined in the Indenture), each holder of the Notes will have the right to require FTAI Infrastructure to repurchase all or any
part of that holder’s Notes at a purchase price of 101% of the principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, to, but not including, the date of such repurchase.
The Notes will mature on June 1, 2027. Prior to June 1, 2025, FTAI Infrastructure may redeem some or all of the Notes at a redemption price equal to 100% of the
principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but not including the applicable redemption date, plus a “make-whole” premium. On or after June 1, 2025, FTAI Infrastructure may redeem some or all of the Notes
at any time at declining redemption prices (in each case expressed as a percentage of the principal amount on the redemption date) equal to (i) 105.250% beginning on June 1, 2025, and (ii) 100.000% beginning on June 1, 2026 and thereafter, plus, in
each case, accrued and unpaid interest, if any, to, but not including, the applicable redemption date. In addition, FTAI Infrastructure may also redeem up to 40% of the aggregate principal amount of the Notes at any time prior to June 1, 2025,
with the net proceeds from certain equity offerings, subject to the satisfaction of certain conditions.
The foregoing description of the Indenture contained herein does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full
text of the Base Indenture, as supplemented by the First Supplemental Indenture.
The Additional Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and, unless so registered, may not be offered
or sold in the United States absent registration or an applicable exemption from registration requirements.