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CHARLOTTE, NC – Air T Inc. (NASDAQ:AIRT), an air courier service provider with a market capitalization of $55.66 million and annual revenue of $298.21 million, has announced the entry into a new term loan agreement with Bank of America, N.A., and the concurrent termination of a previous credit arrangement, according to a recent 8-K filing with the Securities and Exchange Commission. InvestingPro analysis indicates the company operates with a significant debt burden, though its liquid assets exceed short-term obligations.
On Monday, Mountain Air Cargo, Inc. (MAC), a fully-owned subsidiary of Air T Inc., entered into a term loan valued at $2.28 million with Bank of America. The loan, which matures on February 21, 2030, stipulates monthly interest payments starting March 21, 2025. MAC will also make monthly principal payments of $9,500 and retains the option to prepay in full or in part without penalty. The loan’s interest rate is set at Term SOFR plus 1.75%, but a swap agreement fixed the rate at 5.99448%. This adds to the company’s existing total debt of $142 million, with a debt-to-equity ratio of 27.77x. For detailed financial metrics and additional insights, consider a subscription to InvestingPro, which offers comprehensive analysis of Air T’s debt structure and financial health.
To secure the loan, MAC mortgaged its property at 5930 Balsom Ridge Road, Denver, North Carolina. The agreement includes several covenants, such as submitting financial information, maintaining a fixed coverage ratio of at least 1.25:1.0, and restrictions on additional debts, asset maintenance, and ownership changes.
In addition, Alerus Financial (NASDAQ:ALRS), National Association agreed to Amendment No. 2 to Credit Agreement and Consent on February 21, 2025. This amendment allowed for Alerus’ consent to the new financing and updated previous agreements to permit the additional borrowings and remove the lien on the Denver property. MAC utilized the proceeds from the new loan to repay Term Note B with Alerus, and Air T Inc. acknowledged and agreed to the outlined transactions.
The 8-K filing further indicates that the termination of the Term Note B with Alerus is connected to the new financial obligations incurred by the company. The filing includes detailed exhibits of the credit agreements and amendments, underscoring the formalization of these financial transactions.
This strategic financial restructuring reflects Air T Inc.’s ongoing efforts to manage its capital and secure favorable terms for its financial operations. The company maintains a current ratio of 1.9, indicating adequate liquidity to meet short-term obligations. The company’s latest moves are detailed in the attached exhibits of the 8-K report, which provide an in-depth look at the terms and conditions of the new loan and the termination of the previous agreement. According to InvestingPro Fair Value analysis, the stock appears slightly overvalued at its current price of $20 per share. Subscribers can access over 30 additional financial metrics and insights about Air T’s financial health.
In other recent news, Air T Inc has announced an extension of its revolving credit agreement with Alerus Financial, as disclosed in a filing with the Securities and Exchange Commission. The amendment extends the credit facility’s maturity from February 28, 2026, to August 28, 2026. This extension is the only change to the agreement, with all other terms remaining consistent with the original credit agreement. This financial move provides Air T Inc with continued financial flexibility for an additional six months, supporting its operations in the air courier sector. The extension is part of Air T Inc’s broader financial strategy, involving its subsidiaries engaged in various aviation-related businesses. Investors and stakeholders can refer to the full text of the amendment filed with the SEC for a detailed understanding of its implications. The information is based on a press release statement filed with the SEC, offering a factual overview of Air T Inc’s recent financial arrangement.
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