WILMINGTON, OH – May 28, 2019 – Air Transport Services Group, Inc. (NASDAQ:ATSG) announced today that it has obtained lender commitments for a one-year extension through May 2024 of its secured credit facility, and an expansion of the facility’s revolver portion.
The amendment to ATSG’s agreement with a consortium of banks, led by SunTrust, increases the revolving credit portion of the facility by $100 million, to $645 million. ATSG is exercising its access to additional credit, with lender consent, through an accordion feature of the facility. The exercise reduces the additional credit available under the accordion feature to $300 million from $400 million.
Quint Turner, Chief Financial Officer of ATSG, said the banks’ response to the latest amendment was excellent, with interest in the group exceeding the $100 million ATSG requested.
"This additional revolver capacity, along with the growing cash flows generated by ATSG’s businesses, will support our program to meet the strong domestic and international demand for our aircraft,” he said. “In particular, we will invest the majority of our $475 million capital expenditure budget in 2019 to acquire thirteen Boeing 767-300s. We expect to convert and add nine 767s to our freighter leasing portfolio during the year, with a tenth aircraft remaining in passenger configuration and operated by our airline subsidiary Omni Air International, acquired in November 2018. Cargo Aircraft Management, our aircraft leasing subsidiary, continues to benefit from strong demand from customers who desire the efficiency of the Boeing 767 in their cargo air network operations, where expanding shipment volumes have been driven by the secular shift to e-commerce."
The outstanding revolver balance at March 31, 2019, was $488 million. The senior credit facility also includes two term loans with a combined balance at March 31 of $723 million.
The variable interest rate structure on the revolver facility remains unchanged. Rates are affected by LIBOR, plus a credit spread that adjusts quarterly based on the ratio of ATSG's total debt to its trailing annual EBITDA. The revolver interest rate is currently 4.74 percent.