S&P shifts FTAI outlook to positive

S&P said it revised its outlook for Fortress Transportation and Infrastructure Investors LLC to positive from stable and affirmed the B ratings on FTAI and its senior unsecured notes. The 3 recovery rating on the notes is unchanged.

“We expect FTAI's operating performance and credit metrics to benefit from the spinoff of the infrastructure segment. In August 2022, FTAI completed the previously proposed spinoff of its infrastructure segment. Subsequently, the company used $730.3 million of dividend proceeds received from the spun-off entity, FTAI Infrastructure Inc. (B-/stable/--), to repay some of its outstanding debt. Over the last few years, the weak operating contribution from this segment and significant capital spending toward expanding the various infrastructure projects have weighed heavily on FTAI's profitability and credit metrics,” S&P said in a press release.

S&P said it sees FTAI’s metrics to benefit from the spinoff.

“Specifically, we forecast EBIT interest coverage to improve to the low-1x area in 2022 (compared with less than 1x in 2021), and to the mid-1x area in 2023. We expect the ratio of funds from operations (FFO) to debt to improve to the high-single-digit percent area in 2022 (compared to about 1% in 2021) and further to the low-teens percent area in 2023,” the agency said.

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