Fortress Transportation & Infrastructure LLC Announces Fixed-to-Floating Rate Preferred

Fortress Transportation & Infrastructure (NASDAQ:FTAI) has announced an offering of FTF rate preferred stock.

I am not familiar with FTAI and will need to do some due diligence. The company is a LLC so it will likely issue a K-1 for this preferred

The preliminary prospectus is here.

It certainly appears that anyone that needs some cash is jumping into the marketplace. It could be a wild fall for issuance and redemptions.

16 thoughts on “Fortress Transportation & Infrastructure LLC Announces Fixed-to-Floating Rate Preferred”

  1. I doubt that I’d be interested in this issue anyway, but I sure wish that people would stop using LIBOR supported by what looks to me to be gibberish. One of my favorite lines is

    “We will appoint a third party independent financial institution of national standing with experience providing such services as calculation agent for the Series A Preferred Shares prior to the commencement of the Floating Rate Period.”

    And from there on it gets worse.

    1. FTAI
      is a serious company. It has two units. One leases aircraft engines. They down only two models and seem to be making a lot of money at it. Moreover, they have not been clear but they are doing a jv with a repair group which will allow them to reduce the amount of time engines are out of service for required maintenance. This could reduce time from five or six months to three. A major savings for their clients.
      2. The second part of the business is building infer structure assets largely for energy products. They have three main projects two of which should come on line late this year.
      Until now the engin side of things has been earning enough to allow them to make fairly high payouts i.e. about 8%. I personally wish that they had split the two businesses since all the other aircraft leasing firms pay a lot less than does FTAI. Management are finance types not builder operators so that I expect that the infer structure projects on completion could get sold off or at least large partners brought in. These guys strike me more like flippers than build and holders. I could be wrong. Given the strong cash flow against engine leases and future income from the other side of the business, I was a bit surprised by the high yield. FTAI in their infer structure activity are a bit like a small BIP Since BIP is buying up assets in the U.S, they could be a potential buyer of FTAI assets and they do know how to run them. The parent company BIP has lots of money but uses low payouts and has not to my mind been unit holder friendly.
      I would consider buying the preferred. But just my take. SC

        1. Tim- most welcome. When you look at the fine print could you check the taxation issues. I’ve not looked at enough of these to tell if this one has anything special . Does seem complex. Would value your views. best sc

      1. Would this company be similar to Triton International LTD or CAI International Inc both of which have preferred stock issued paying over 8% and trading well above par? TRNT.B, CAI.A and CAI.B.

        1. Really different company in terms of business than Triton. The company has a couple different, interesting lines of business. They have been maintaining a high 8% dividend on their common stock thanks to good cash flow which provides a measure of protection

          I am in for some shares slightly under par

        2. They share somethings in common in that they are basically leasing equipment in their cash income side now. But in two years time they will also have several major infrastructure projects on line which will make them more like BIP. Also like BIP, I expect that when these are profitable and massively risk reduced, FTAI will sell down all or part of these projects. The aircraft engine side is probably more stable and long term for them as the returns seem higher .

      1. ed, just to be clear my comment was about Fortress, not GLP.

        i hold GLP-A in the mad-money part of the portfolio. decent business but a lot of debt.

        1. Bob, that is one (GLP-A) high yielders I love playing with. Sold out a couple weeks ago needing money for something around $26.25. Then one day last week I cratered oddly when common was up. So next thing you know, I selling something to buy it back at $25.65.

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