FTAI Infrastructure plans $500 million private note offering

FTAI Infrastructure Inc. (NASDAQ:FIP), a $797 million market cap company specializing in railroad line-haul operations, has announced its intention to launch a private offering of senior secured notes due 2032, aiming to raise $500 million, subject to market conditions.

According to InvestingPro data, the company already operates with a significant debt burden of $1.6 billion. This announcement was made today, and the offering will be carried out by Long Ridge Energy LLC, a subsidiary of FTAI Infrastructure.

The notes, guaranteed by Long Ridge Energy LLC and its subsidiary guarantors, will be secured by a first-priority lien on various assets, including real and tangible property, and a first-priority security interest in membership interests in certain subsidiary guarantors.

Funds from this offering, along with proceeds from a new $500 million senior secured term loan, will be utilized to repay approximately $599 million in existing loans, fund reserve and capital accounts, manage costs associated with electricity sale derivative contracts, and cover fees and expenses related to the offering and loan repayments.

The notes are targeted at qualified institutional buyers in the U.S. and international investors under Regulation S of the Securities Act. They will not be registered under the Securities Act or any state securities laws, and thus may not be offered or sold in the U.S. without registration or an applicable exemption.

This move comes as part of FTAI Infrastructure’s strategic financial management, aiming to optimize its capital structure and enhance its financial flexibility. The company’s forward-looking statements indicate plans and expectations, but are subject to uncertainties including the successful execution of the new term loan, the offering of the notes, and the anticipated benefits of the derivative transactions. For deeper insights into FIP’s debt structure and comprehensive financial analysis, investors can access detailed debt metrics and 10+ additional ProTips through InvestingPro’s exclusive research reports.

The information disclosed is based on a press release statement and does not constitute an offer of securities or a solicitation of an offer to buy securities.

In other recent news, FTAI Infrastructure Inc. announced a new financing strategy, intending to refinance approximately $599 million in existing loans through Long Ridge Energy & Power LLC, a company in which FTAI Infrastructure holds equity. The move is expected to yield annual revenues of around $223 million and an adjusted EBITDA of approximately $160 million. Furthermore, FTAI Infrastructure is in discussions with LIF LR Holdings, LLC, an affiliate of GCM Grosvenor L.P., to acquire its 49.9% interest in Long Ridge for an estimated $200 million.

These recent developments come after the company reported a record adjusted EBITDA of $36.9 million for Q3 2024, marking a 50% increase year-over-year. The company also announced a quarterly dividend of $0.03 per share. The total annual EBITDA is projected to reach approximately $220 million, with potential growth to over $300 million due to new business opportunities.

FTAI Infrastructure’s key segments, such as Transtar, Jefferson, Repauno, and Long Ridge, are contributing to this growth, with new contracts and refinancing plans expected to enhance future cash flow. For instance, Jefferson’s new contracts are expected to contribute an additional $20 million annually from 2025. In addition, Repauno’s Phase 2 transloading contract is projected to add $60-70 million annually upon completion.

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