FTAI Infrastructure Inc., a company specializing in railroad line-haul operating, has successfully completed a significant financing deal involving the issuance of $382 million in bond financing. The transaction, which took place on Thursday, was executed through the company's subsidiaries within the Jefferson Terminal segment and the Port of Beaumont Navigation District of Jefferson County, Texas.
The financing comprises two series of bonds: $164.4 million of Series 2024A Dock and Wharf Facility Revenue Bonds with interest rates ranging from 5.000% to 5.250% and maturing between 2039 and 2054; and $217.9 million of Taxable Series 2024B Facility Revenue Bonds with a fixed interest rate of 10.000% maturing in 2026.
The Series 2024 Bonds are secured by payments from Jefferson to the Port, including those under the Senior Loan Agreement and the Facilities Lease, and are limited obligations of the Port. The proceeds from the bonds will be used to pay or reimburse Jefferson for the cost of the Taxable Series 2024B Project.
In conjunction with the bond issuance, Jefferson entered into a Second Amended and Restated Senior Loan Agreement with the Port. This agreement includes various covenants, such as limitations on additional indebtedness, investments, and liens, all subject to specified exceptions.
Moreover, a Facilities Lease was signed, leasing the 2024 Tax-Exempt Facilities to Jefferson for a 50-year term. Jefferson is responsible for the acquisition, construction, and completion of these facilities, with rental payments set to cover the principal and interest on the Series 2024A Bonds. Jefferson also has the option to purchase the 2024 Tax-Exempt Facilities under certain conditions.
A Leasehold Deed of Trust was also executed, granting a lien on and security interest in Jefferson's rights and interests in the Facilities Lease, related ground lease, and other assets to the trustee for the benefit of the collateral agent on behalf of the Series 2024 Bond owners.
This financial move is part of FTAI Infrastructure's broader strategy to optimize its capital structure and invest in its infrastructure projects. The information disclosed is based on a press release statement.
In other recent news, FTAI Infrastructure has been the subject of several noteworthy developments. Compass Point adjusted its outlook for the company, raising the price target to $11 from the previous $7 while maintaining a Buy rating.
This decision followed FTAI Infrastructure's first-quarter 2024 adjusted EBITDA report, which fell short of estimates, primarily due to an unforeseen refinery outage at Jefferson Terminal and higher than expected professional expenses. Despite these setbacks, Compass Point anticipates a complete reversal in the second quarter of 2024.
FTAI Infrastructure has also announced new initiatives, including a capital structure action at Jefferson Terminal and new commercial opportunities at Transtar, which are expected to contribute significantly to the company's value. Jefferson Terminal has been experiencing record throughput volumes and is projected to report record results for the second quarter of 2024. The company is also on track to exit fiscal year 2024 with an estimated $80 million annualized EBITDA run-rate.
In the first quarter of 2024, FTAI Infrastructure reported a 24% increase in adjusted EBITDA to $37.2 million, driven by strong results from its subsidiary Transtar and consistent operations at Long Ridge. The company projects a run rate EBITDA exceeding $200 million for the year and has announced a quarterly dividend of $0.03 per share.
FTAI Infrastructure also plans new debt financing at Jefferson to refinance existing obligations and fund dock improvements. These recent developments underscore the company's growth prospects and value creation efforts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.