Air Transport Services to redeem $700M senior notes

WILMINGTON, OH - Air Transport Services Group, Inc. (NASDAQ:ATSG), which has seen its stock surge 62% over the past year and currently trades near its 52-week high of $22.38, has announced plans to fully redeem its $700 million in outstanding 4.750% Senior Notes due in 2028. The redemption is set for April 11, 2025, and is contingent upon the completion of a merger with Stonepeak Nile MergerCo Inc. According to InvestingPro analysis, the company’s current market capitalization stands at $1.46 billion.

The company, which operates in the air courier sector under the organization name 01 Energy & Transportation, stated today that the trustee of the notes, Regions Bank, has issued a notice to holders regarding the conditional redemption. This action follows an indenture agreement dated January 28, 2020, as supplemented by the First Supplemental Indenture dated April 13, 2021.

The redemption of the 2028 Notes is predicated on the successful merger outlined in the Agreement and Plan of Merger dated November 3, 2024. If the merger is executed or the condition is waived, the notes will be redeemed at 100% of their principal value, plus accrued and unpaid interest up to but not including the Redemption Date.

The redemption is in line with Section 3 of the Base Indenture, and the company has made clear that this announcement does not constitute an offer to purchase the 2028 Notes or any other security.

The details of the indenture and the associated notes have been provided in previous SEC filings. The Base Indenture was filed on January 28, 2020, and the First Supplemental Indenture on April 13, 2021, both of which are incorporated by reference into this current report.

Air Transport Services Group, Inc., formerly known as ABX Holdings, Inc. and ABX Air Inc., is incorporated in Delaware and has its principal executive offices in Wilmington, Ohio. The company’s fiscal year ends on December 31. With an EBITDA of $518.7 million in the last twelve months, ATSG demonstrates significant operational scale. InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report, offering deep-dive analysis of ATSG’s financial health and market position.

This report is based on a press release statement and does not include any speculative information about the potential effects of the redemption or the merger on the company’s financial position or market performance.

In other recent news, Air Transport Services Group reported mixed fourth-quarter results, with earnings surpassing analyst expectations while revenue fell slightly short. The company posted adjusted earnings per share of $0.40, exceeding the analyst consensus of $0.29. Revenue for the quarter was $517 million, just below the expected $524.6 million. Despite the revenue miss, adjusted EBITDA increased to $162.2 million from $129.9 million in the same quarter the previous year. Free cash flow also saw a significant improvement, rising to $34.7 million compared to a negative $65.5 million a year ago. The company’s aircraft leasing business continued to show momentum, highlighted by the placement of its ninth converted 767-300 freighter with an external customer. Additionally, profitability in ACMI Services improved, with ten additional aircraft provided by Amazon (NASDAQ:AMZN) operating during the quarter. Air Transport Services Group generated $228 million in free cash flow for the full year 2024 and remains on track to complete its acquisition by Stonepeak in the first half of 2025.

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