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Air T Inc. (NASDAQ:AIRT), a $49 million market cap company with annual revenues of $298 million, has entered into a new financing agreement, according to a recent SEC filing. The company, along with its subsidiary AAM 24-1, LLC, has signed a Third Note Purchase Agreement with institutional investors to issue a Multiple Advance Senior Secured Note. The note allows for an aggregate principal amount of up to $100 million. According to InvestingPro data, the company already operates with a significant debt burden, though its liquid assets currently exceed short-term obligations with a healthy current ratio of 1.9.
As of the closing date on May 30, the investors have already advanced $10 million, with a total of $40 million disbursed under the note. Subject to certain conditions and the absence of default, the investors are committed to providing an additional $60 million in $10 million increments on specified dates: September 30, 2025; January 30, 2026; May 30, 2026; September 30, 2026; January 30, 2027; and May 30, 2027. This new financing adds to the company’s existing total debt of $142 million.
The Multiple Advance Note carries an annual interest rate of 8.5%, calculated on a 30/360-day basis, and is payable semi-annually. The note is set to mature on May 31, 2035. The agreement replaces previous financing arrangements, with the prior notes being canceled.
The note includes standard default provisions, such as failure to make payments, non-compliance with covenants, or bankruptcy. The company retains the option to prepay the note, subject to a prepayment premium of 2% within the first year and 1% in the second year. Prepayment amounts must be at least $1 million.
Collateral for the note includes the company’s equity interests assigned to the issuer, including 320,000 shares of Alpha Income Trust Preferred Securities held by Air T Funding.
This information is based on a press release statement filed with the SEC.
In other recent news, Air T, Inc. has made significant strides with its subsidiary, Mountain Air Cargo, completing the acquisition of Royal Aircraft Services. This acquisition is aimed at enhancing Mountain Air Cargo’s aircraft maintenance and overhaul services, integrating Royal Aircraft Services’ expertise into its operations. The move is expected to improve operational efficiency and service quality. Additionally, Air T, Inc. has amended its credit agreement with Alerus Financial (NASDAQ:ALRS), securing a new $3 million overline revolving loan to support seasonal borrowing needs. This financial adjustment, which includes a revised $14 million revolving credit note, is designed to provide the company with greater financial flexibility during periods of fluctuating demand. The loan carries an interest rate of either five percent or the one-month term SOFR rate, whichever is higher. The company released certain co-borrowers from loan obligations, reflecting their lack of further borrowing needs. These developments reflect Air T, Inc.’s ongoing efforts to strengthen its financial and operational capabilities.
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