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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________
Form 8-K
 _____________________
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 2021
   _____________________
Air Transport Services Group, Inc.
(Exact name of registrant as specified in its charter)
  _____________________
 
     
DE 000-50368 26-1631624
(State or other jurisdiction
of incorporation) 		Commission
File Number: 		(IRS Employer
Identification No.)
145 Hunter Drive, Wilmington, OH 45177
(Address of principal executive offices, including zip code)
(937) 382-5591
(Registrant's telephone number, including area code)
 _____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class    Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.01 per share    ATSG NASDAQ Stock Market LLC

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 1.01 Entry into a Material Definitive Agreement.
On April 13, 2021, Cargo Aircraft Management, Inc. (the “Issuer”), a wholly-owned, indirect subsidiary of Air Transport Services Group, Inc. (“ATSG”), completed its offering of $200,000,000 in aggregate principal amount of 4.750% senior unsecured notes due 2028 (the “Notes”). The Notes were sold only to persons reasonably expected to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and certain investors pursuant to Regulation S under the Securities Act.
The offering was consummated pursuant to a Purchase Agreement, dated April 7, 2021 (the “Purchase Agreement”), by and among the Issuer, ATSG, certain direct and indirect subsidiaries of ATSG (the “Subsidiary Guarantors,” and together with ATSG, the “Guarantors”), and Truist Securities, Inc., as representative of the several initial purchasers of the Notes. The aggregate principal amount of the Notes increased from $150,000,000 to $200,000,000.
The issue price of the Notes was 102.750% plus accrued interest from February 1, 2021. The yield to worst was 3.960%.
The Issuer will use the proceeds from the offering of the Notes to fund the repayment of certain revolving loans outstanding under ATSG’s and the Issuer’s Third Amended and Restated Credit Agreement, as amended (the “Credit Agreement”), and to pay fees and expenses in connection with the offering of the Notes.
Notes and Indenture
The Notes were issued under and are governed by (i) that certain indenture, dated January 28, 2020 (the “Base Indenture”) and (ii) a supplemental indenture, dated April 13, 2021, by and among the Issuer, ATSG, the Subsidiary Guarantors and Regions Bank, as trustee (“Trustee”) (the "Supplemental Indenture" and together with the Base Indenture, the "Indenture"). The Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Guarantors. The Notes are senior unsecured obligations of the Issuer. Interest will be payable semiannually in arrears on February 1 and August 1 of each year, commencing August 1, 2021. Interest on the Notes will accrue from February 1, 2021. The Notes will mature on February 1, 2028. The related guarantees are senior unsecured obligations of the Guarantors.
The Issuer previously issued $500,000,000 aggregate principal amount of its 4.750% Senior Notes due 2028 (the “Existing Notes”) under the Base Indenture. The Notes constitute an issuance of “Additional Notes” (as such term is defined in the Indenture) under the Indenture. The Notes are fully fungible with the Existing Notes, treated as a single class for all purposes under the Indenture with the same terms as those of the Existing Notes (other than the issue date and issue price). The Existing Notes and the Additional Notes are referred to herein together as the “Senior Notes”).
The Issuer may redeem some or all of the Senior Notes at any time and from time to time prior to February 1, 2023, at a redemption price equal to 100% of the principal amount of the redeemed Senior Notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” amount set forth in the Indenture. On or after February 1, 2023, the Issuer may redeem some or all of the Senior Notes at the redemption prices set forth in the Indenture. In addition, prior to February 1, 2023, the Issuer may redeem up to 40% of the aggregate principal amount of the Senior Notes from the net cash proceeds of one or more qualified equity offerings completed before February 1, 2023, at a redemption price equal to 104.750% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 60% of the aggregate principal amount of the Senior Notes remains outstanding after the redemption and such redemption occurs within 180 days of the date of closing of such qualified equity offering. If ATSG or the Issuer experience specific kinds of changes of control described in the Indenture, the Issuer may be required to make an offer to purchase all or any portion of the Senior Notes at a purchase price of 101% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. Certain asset sales may result in the Issuer being required to offer to purchase a portion of the Senior Notes at a purchase price of 100% of the principal amount of such Senior Notes plus accrued and unpaid interest, if any, to the date of repurchase.
The Indenture contains certain covenants that limit the ability of ATSG and the Restricted Subsidiaries (as defined in the Indenture), including the Issuer, to, among other things: (i) incur additional indebtedness or issue certain preferred equity; (ii) pay dividends on, repurchase, or make other distributions in respect of the capital stock of ATSG or any Restricted Subsidiary or prepay, redeem, or repurchase certain debt or make any restricted investment; (iii) create certain liens; (iv) enter into agreements encumbering or restricting the ability of a Restricted Subsidiary to pay dividends or make distributions, loans or certain asset transfers; (v) engage in certain transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of the assets of ATSG or the Issuer. These covenants are subject to exceptions and qualifications as described in the Indenture. If the Senior Notes receive an investment grade rating from both Standard & Poor’s Rating Services and Moody’s Investors Service, Inc., certain of these covenants will be suspended and no longer apply during the Suspension Period (as defined in the Indenture) if no default has occurred and is continuing at such time.


The Senior Notes and the Indenture contain customary events of default, including, without limitation: (i) failure to pay interest on the Senior Notes for 30 days after becoming due; (ii) failure to pay principal on the Senior Notes when due; (iii) failure to comply with any other agreement or covenant in the Indenture or the Senior Notes and continuance of this failure for 60 days after notice of the failure has been given by the Trustee or by the holders of at least 25% of the aggregate principal amount of the Senior Notes then outstanding; (iv) certain defaults under other mortgages, indentures, instruments or agreements involving indebtedness in an aggregate amount of $100 million or more; (v) failure by ATSG or any of its Significant Subsidiaries (as defined in the Indenture) (or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Parent and its Restricted Subsidiaries) would constitute a Significant Subsidiary) (collectively, “Relevant Entities”) to pay final judgments aggregating in excess of $100 million that have not been satisfied, stayed, annulled or rescinded within 90 days of becoming final; (vi) certain bankruptcy events of any Relevant Entity; and (vii) except as permitted by the Indenture, any guarantee of the Senior Notes by ATSG or any other Relevant Entity ceases to be in full force and effect or is unenforceable or any Relevant Entity denies its liability under its guarantee.
Affiliates of one or more of the initial purchasers serve as lenders under the Credit Agreement and, as such, will receive a portion of the net proceeds from the offering that are used to fund the repayment of certain revolving loans under the Credit Agreement.
The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
The description above is qualified in its entirety by the Supplemental Indenture, which is filed with this Form 8-K, and the Base Indenture and Form of Note, which were previously filed as Exhibits 4.1 and 4.2, respectively, to ATSG’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 28, 2020.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding the Indenture, including the Supplemental Indenture, and the Notes set for in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1*
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
*filed herewith.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AIR TRANSPORT SERVICES GROUP, INC.
By: /S/  W. JOSEPH PAYNE
W. Joseph Payne
Chief Legal Officer & Secretary
Date: April 13, 2021




Execution Version
SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of April 13, 2021, among CARGO AIRCRAFT MANAGEMENT, INC., a Florida corporation (the “Issuer”), the guarantors party hereto (the “Guarantors”) and REGIONS BANK, an Alabama state banking corporation, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Issuer, the Guarantors and the Trustee previously executed and delivered an indenture, dated as of January 28, 2020 relating to the issuance of 4.750% Senior Notes due 2028 (the “Original Indenture”);

WHEREAS, pursuant to and on the date of the Original Indenture, the Issuer initially issued $500,000,000 aggregate principal amount of its 4.750% Senior Notes due 2028 (the “Initial Notes”);

WHEREAS, Section 2.01(e) of the Indenture provides that Additional Notes may be issued from time to time by the Issuer (subject to the Issuer’s compliance with Section 4.10 of the Indenture) without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and, except as set forth therein, shall have the same terms as to status, redemption or otherwise as the Initial Notes;

WHEREAS, the Issuer and the Guarantors desire to execute and deliver this Supplemental Indenture for the purpose of issuing an additional $200,000,000 aggregate principal amount of 4.750% Senior Notes due 2028, having terms substantially identical in all material respects to the Initial Notes (the “Additional 2028 Notes” and, together with the Initial Notes, the “Notes”) to be authenticated and delivered as provided in this Indenture;

WHEREAS, all conditions and requirements necessary to the execution and delivery of this Supplemental Indenture have been done and performed and the execution and delivery hereof has been in all respects duly authorized; and

WHEREAS, Section 9.01(6) of the Indenture provides that the Issuer, the Guarantors and the Trustee may supplement the Indenture without the consent of any Holder to provide for the issuance of Additional Notes in accordance with the terms of the Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1.    Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any


particular section hereof. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2.    Additional Notes. As of the date hereof, the Issuer will issue, the Guarantors will guarantee and the Trustee is directed to authenticate and deliver, pursuant to Section 2.01(e) of the Indenture, the Additional 2028 Notes in an aggregate principal amount of $200,000,000, which constitute Additional Notes under the Indenture, having terms identical to the Initial Notes (other than issue date and the date from which interest accrues), at an issue price of 102.750%, plus accrued and unpaid interest from February 1, 2021. The interest on the Additional 2028 Notes shall be deemed to have accrued from February 1, 2021. The Initial Notes and the Additional 2028 Notes shall be treated as a single class for all purposes, including voting, under the Indenture. The Additional 2028 Notes shall be substantially in the form of Exhibit A to the Indenture and shall bear the Private Placement Legend.
3.    Necessary Actions. Each of the Issuer and the Guarantors hereby represents and warrants that all actions necessary to give effect to this Supplemental Indenture have been taken. The Company shall execute and the Trustee shall, pursuant to an authentication order delivered as of the date hereof, authenticate the Additional Notes in substantially the form included in the Indenture.
4.    Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER JURISDICTION.
5.    Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Delivery of an executed counterpart of a signature page to this Supplemental Indenture by telecopier, facsimile, email or other electronic transmission (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Supplemental Indenture. The words “execution,” “signed,” “signature,” and words of like import in this Supplemental Indenture or in any other certificate, agreement or document related to this Supplemental Indenture shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.

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6.    Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.

7.    The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Issuer and the Guarantors. The Trustee shall not be accountable for the use or application by the Issuer of the Initial Notes or any Additional Notes or the proceeds thereof.

8.    Continued Effect. Except as expressly supplemented and amended by this Supplemental Indenture, the Indenture shall continue in full force and effect in accordance with the provisions thereof, and the Indenture (as supplemented and amended by this Supplemental Indenture) is in all respects hereby ratified and confirmed. This Supplemental Indenture and all the terms and conditions of this Supplemental Indenture, with respect to the Notes, shall be and be deemed to be part of the terms and conditions of the Indenture for any and all purposes.



[The remainder of this page is intentionally left blank.]





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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.



Cargo Aircraft Management, Inc., a Florida corporation


By:    /s/ Richard F. Corrado_________        
    Name:      Richard F. Corrado
    Title: Chief Executive Officer


[Signature Page to Supplemental Indenture]

[GUARANTORS]:

Air Transport Services Group, Inc., a Delaware corporation


By:    /s/ W. Joseph Payne________________        
    Name:    W. Joseph Payne
    Title:    Chief Legal Officer & Secretary


ABX Air, Inc., a Delaware corporation
Advanced Flight Services, LLC, a Nevada limited liability company
Air Transport International Limited Liability Company, a Nevada limited liability company
Airborne Global Solutions, Inc., a Delaware corporation
Airborne Maintenance and Engineering Services, Inc., a Delaware corporation
Airborne Training Services, Inc., a Delaware corporation
AMES Material Services, Inc., an Ohio corporation
Cargo Aviation, Inc., a Florida corporation
Cargo Holdings International, Inc., a Florida corporation
LGSTX Cargo Services, Inc., a Delaware corporation
LGSTX Distribution Services, Inc., an Ohio corporation
LGSTX Fuel Management, Inc., a Florida corporation
LGSTX Services, Inc., a Delaware corporation
Omni Aviation Leasing, LLC, a Nevada limited liability company
PEMCO World Air Services, Inc., a Delaware corporation
T7 Aviation Leasing, LLC, a Nevada limited liability company



By:    /s/ W. Joseph Payne________________        
    Name:    W. Joseph Payne
    Title:    Secretary
[Signature Page to Supplemental Indenture]


Air Transport International, Inc., a Delaware corporation
TriFactor Solutions, LLC, a Florida limited liability company



By:    /s/ Timothy J. Allen________________        
    Name:    Timothy J. Allen
    Title:    Secretary
[Signature Page to Supplemental Indenture]

Omni Air International, LLC, a Nevada limited liability company



By:    /s/ Richard F. Corrado________________        
    Name:    Richard F. Corrado
    Title:    Secretary




[Signature Page to Supplemental Indenture]


REGIONS BANK,
as Trustee
    
By:    /s/ Craig A. Kaye_________________        
    Name: Craig A. Kaye
    Title: Vice President



[Signature Page to Supplemental Indenture]