Moody's changes FTAI outlook to negative

Moody's Investors Service said it changed FTAI Infrastructure, Inc.'s (FIP) outlook to negative from stable after the company announced it will sell $100 million of add-on senior secured notes due 2027. The add-on notes are expected to be fungible with the existing $500 million of notes.

Concurrently, Moody's affirmed FIP's other ratings, including the B2 corporate family rating, B2-PD probability of default rating and the B2 senior secured notes rating.

FIP will use the proceeds to repay borrowings under the unrated subsidiary Transtar, LLC’s revolving credit facility for $50 million and a $25 million bridge loan and to boost cash liquidity, after paying transaction-related fees and expenses.

“The negative outlook reflects higher than expected financial leverage, weak interest coverage, and the need for good execution of FIP's underlying businesses to sustain sufficient liquidity and support any potential growth. The company has underperformed Moody's expectations thus far, with weaker cash flow necessitating additional debt issuance. Without improvements in earnings and liquidity, the ratings could be downgraded,” the agency said in a statement.

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