Air T announces new $6 million term loan and $15 million revolving credit facility

Air T, Inc. (NASDAQ:AIRT) disclosed Monday that on November 24, its subsidiaries completed two financing agreements with Alerus Financial, National Association, according to a statement based on a recent SEC filing.

Air T Acquisition 22.1, LLC entered into a $6 million term loan with Alerus. The proceeds were used to repay an outstanding $3.5 million loan from Bridgewater Bank. The new loan matures on or before November 24, 2032, with an interest rate set at the greater of 5.0% or 1.90% plus the CME one-month term SOFR rate. Interest payments are due monthly, and annual principal repayments of $857,142.86 are scheduled each September 30, beginning in 2026. The loan may be prepaid at any time without penalty. It is secured by all assets and membership interests of 22.1, 200,000 shares of Air T Funding Trust Preferred Securities, and an investment account of Air T, Inc. The agreement includes standard affirmative and negative covenants, such as liquidity requirements and limitations on additional debt or changes in control.

Contrail Aviation Services, LLC and Contrail Aviation Leasing, LLC, both Air T subsidiaries, also entered into a Master Loan Agreement with Alerus for a $15 million revolving credit facility. The funds are designated for engine purchases and working capital. The facility bears interest at one-month SOFR plus 3.11%, with interest-only payments required until the loan matures on November 24, 2027. There is no prepayment penalty, and the loan requires a 30-day resting period if a specified debt service coverage ratio is exceeded. The facility is secured by all Contrail assets and a payment guaranty from Air T, Inc. for up to $2 million plus certain recovery costs. The agreement also contains standard covenants related to financial reporting, collateral inspection, insurance, and limitations on restricted payments, additional indebtedness, and changes in control.

The disclosure is based on a press release statement contained in Air T, Inc.’s SEC filing.

In other recent news, Air T, Inc. announced its agreement to acquire Regional Express Holdings Limited, a prominent regional airline in Australia. The acquisition is expected to be finalized by the end of the year, subject to necessary approvals, and includes a restructuring agreement with the Commonwealth of Australia regarding Rex’s financing arrangements. This move marks a significant expansion for Air T in the international aviation market. Additionally, Air T amended its credit agreement with Alerus Financial, increasing its revolving credit line to $20 million. The amended agreement also features a reduced interest rate and an extended maturity date set for August 28, 2027. These changes aim to provide Air T with enhanced financial flexibility. The company will now submit quarterly financial statements to its lender, with financial covenants assessed semi-annually. These developments reflect Air T’s strategic efforts to strengthen its financial position and expand its operational footprint.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.