Air T, Inc. Secures $15.0 Million in Private and Non-Recourse Debt Transaction, Propelling Strategic Growth Initiatives
March 05, 2024 at 04:05 pm EST
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Air T, Inc. recently announced the closing of a direct, structured $15,000,000 private note transaction with a major pension plan on February 22, 2024 (the "Transaction"). The Transaction involved 7-year notes bearing 8.5% interest per annum. The Company believes that the Transaction represents an important step forward as it allows the Company to securitize its ownership in more than fifteen aviation-related joint venture interests, currently managed by its subsidiaries, in order to raise non-recourse debt which the Company can use to pay down other debt, as well as make further aviation-related investments.
As part of the Transaction, all of the cash flows from the securitized joint venture interests will be used to pay interest and principal, with the excess available to make additional aviation-related joint venture investments within the structure. The Transaction will also allow the Company to redeploy capital into other opportunities. Some of the proceeds from the Transaction were used to fully pay down the Company's revolving debt facility with Minnesota Bank & Trust.
Air T, Inc. is a holding company with a portfolio of operating businesses and financial assets. The Company has four segments: Overnight air cargo, Ground equipment sales, Commercial jet engines and parts, and Corporate and other. Overnight air cargo segment operates in the air express delivery services industry. Ground equipment sales segment manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, military and industrial customers. Commercial jet engines and parts segment manages and leases aviation assets, supplies surplus and aftermarket commercial jet engine components, provides commercial aircraft disassembly/part-out services, commercial aircraft parts sales, and procurement services and overhaul and repair services to airlines. Corporate and other segment acts as the capital allocator and resources for other consolidated businesses. Further, the segment is also comprised of insignificant businesses.