Item 1.01 Entry into a Material Definitive Agreement
On January 7, 2022, Contrail Aviation Support, LLC and Contrail Aviation
Leasing, LLC (collectively "Contrail Aviation"), a 79%-owned subsidiary of Air
T, Inc. (the "Company"), completed an interest rate swap transaction with Old
National Bank with respect to the $43.6 million loan made to Contrail Aviation
in November 2020 pursuant to the Main Street Priority Loan Facility as
established by the U.S. Federal Reserve. In connection with the transaction, Old
National Bank and Contrail Aviation entered into the 2002 ISDA Master Agreement,
along with the Schedule to such Agreement. The related trade confirmation was
executed on January 7, 2022. The purpose of the floating-to-fixed interest rate
swap transaction was to effectively fix the loan interest rate at 4.68%.
Notwithstanding the terms of the interest rate swap transaction, Contrail
Aviation is ultimately obligated for all amounts due and payable under the
financing. The Company and Contrail Aviation may enter into additional swap
transactions in the future from time to time.
The description of the ISDA Master Agreement and the Schedule to such Agreement
set forth above is qualified in its entirety by reference to the ISDA Master
Agreement and the Schedule to such Agreement, copies of which are filed as
Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated
herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
To the extent required by Item 2.03 of Form 8-K, the information contained in
Item 1.01 of this Current Report on Form 8-K is incorporated by reference into
this Item 2.03.
Item 9.01 Financial Statements and Exhibits
10.1 International Swaps and Derivatives Association, Inc. 2002 Master
Agreement dated as of December 28, 2021 between Old National Bank and Contrail
Aviation Support, LLC & Contrail Aviation Leasing, LLC.
10.2 Schedule to the 2002 Master Agreement dated as of December 28, 2021
between Old National Bank and Contrail Aviation Support, LLC & Contrail Aviation
Leasing, LLC, including Swap Transaction Confirmation dated January 7, 2022.
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