Business Context and Reporting Period
This Form 8-K Current Report was filed by Fortress Transportation and Infrastructure Investors LLC (FTAI) on March 25, 2021. The filing reports the closing of a registered public offering of preferred shares and the associated amendment to the Company's Limited Liability Company Agreement.
Key Financial Metrics and Capital Structure
The filing details a capital raise through the issuance of preferred equity rather than reporting operational financial metrics such as revenue or cash flow.
- Instrument Issued: 8.25% Series C Fixed-Rate Reset Cumulative Perpetual Redeemable Preferred Shares.
- Shares Sold: 4,000,000 base shares plus 200,000 shares pursuant to the partial exercise of the over-allotment option, totaling 4,200,000 shares.
- Redemption Price: $25.00 per share (implying a gross proceeds total of approximately $105 million).
- Dividend Rate: 8.25% per annum fixed until June 15, 2026. Thereafter, the rate resets to the Five-Year Treasury Rate plus 737.8 basis points.
- Seniority: Senior to common shares; pari passu with Series A and Series B preferred shares regarding distributions and liquidation rights.
Material Changes Versus Prior Period
The primary material change is the expansion of the Company's capital structure through the new Series C Preferred Shares. This issuance increases the Company's cumulative preferred equity obligations and modifies the rights of security holders via the Fourth Amended and Restated Limited Liability Company Agreement.
Outlook, Risks, and Unusual Items
Redemption Provisions: The Company may redeem the shares on or after June 15, 2026, at $25.00 per share. Early redemption is permitted at a premium ($25.50 or $25.25) under specific conditions including Rating Events, Tax Redemption Events, or Change of Control.
Change of Control Risk: If a Change of Control occurs and the Company does not redeem the shares within 31 days, the distribution rate will increase by 500 basis points.
Voting Rights: Holders generally have no voting rights unless the Company fails to pay dividends for six or more quarterly periods.
Liquidity and Maturity: The shares have no stated maturity, are not subject to a sinking fund, and will remain outstanding indefinitely unless redeemed.
Investor Verification Checklist
- Verify the total net proceeds received after underwriting discounts and commissions (not explicitly stated in this text).
- Confirm the exact date of the first dividend payment and the record date.
- Review the full text of the Share Designation (Exhibit 3.2) for detailed definitions of "Rating Event" and "Tax Redemption Event."
- Assess the impact of the new 8.25% fixed obligation on the Company's overall cost of capital and leverage ratios.
- Monitor the Company's credit rating to evaluate the risk of a "Rating Event" triggering early redemption at a premium.