v3.26.1
Financing Arrangements
 3 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Financing Arrangements Debt Investments
The Company participates in profit participation notes receivable ("PPN") as part of the Company's investment strategy in association with its aircraft investments. The Company has subscribed to one PPN with Blue Crest Prospector Pico Duarte DAC ("Pico Duarte") and a second PPN with Blue Crest Aerie 1 DAC ("Aerie"). The issuer of the PPN utilizes the funds received to purchase aircraft investments that are on lease with a third party to generate income to repay the PPNs with interest. The Pico Duarte PPN does not have a stated interest rate, but accrues interest at 100% of the associated profits, as dictated by the respective agreements. The Aerie PPN accrues interest at the greater of 4.0% per annum or 100% of the accumulated net accounting profits, as dictated by the respective agreement. The following table summarizes the terms of the related notes in addition to the principal outstanding (in thousands):
Principal Outstanding
PPN6/30/20263/31/2026Maximum ParticipationMaturity Date
Pico Duarte$4,808 $9,286 $20,000 2/22/2046
Aerie3,484 — 4,000 3/30/2046
Financing Arrangements
On May 30, 2025, the Company, along with AAM 24-1 (the "Issuer"), entered into new transaction documents with two Institutional Investors that replaced the Second Note Purchase Agreement ("Second NPA") transaction documents. Pursuant to the Third Note Purchase Agreement ("Third NPA") with the Institutional Investors, the Issuer agreed to issue and sell a Multiple Advance Senior Secured Note in an aggregate principal amount of up to $100.0 million (the “Multiple Advance Note”). Provided no default or event of default of the Issuer exists, and subject to satisfaction of all requirements for any closing as set forth in the Third NPA, the Investors agreed to advance to the Issuer an additional aggregate $60.0 million in $10.0 million increments, each on or within fifteen days of the following dates, of which the Issuer has received all contractually required advances through June 30, 2026 (in thousands):

September 30, 2025$10,000 
January 30, 202610,000
May 30, 20261
10,000
September 30, 202610,000
January 30, 202710,000
May 30, 202710,000
1 The Investors advanced $15.0 million for the scheduled $10.0 million issuance on May 30, 2026. For the remaining scheduled issuances, the Company has the flexibility to choose which advance amount will be reduced by $5.0 million. As of the date the condensed consolidated financial statements are issued, the Company has not made that determination.

As of June 30, 2026, the Issuer has collectively received a total of $75.0 million of advances from the Investors.

The Multiple Advance Note bears annual interest at a rate of 8.5% which is computed on the basis of a 30/360-day year and actual days elapsed and is payable semi-annually in arrears, pursuant to the terms of the Multiple Advance Note. The maturity date of the Multiple Advance Note is May 31, 2035. The Multiple Advance Note contains standard and customary events of default including, but not limited to, failure to make payments when due under the Multiple Advance Note, failure to comply with certain covenants contained in the Multiple Advance Note, or bankruptcy or insolvency of, or certain monetary judgments against the Issuer or the Company. The prior notes were cancelled and replaced by the Multiple Advance Note. Funds advanced under the Multiple Advance Note may be reinvested for a period of six years from the date of closing.

The Issuer may prepay all or a portion of the outstanding principal and accrued but unpaid interest at any time, provided that (i) if the Issuer prepays all or any portion of the Multiple Advance Note within one year from the Issue Date, the Issuer is required to pay the Investors a prepayment premium equal 2.0% of the amount being prepaid, and (ii) if the Issuer prepays all or any portion of the Multiple Advance Note after the first anniversary of the Issue Date but on or prior to the second anniversary of the Issue Date, the Issuer is required to pay the Investors a prepayment premium equal to 1.0% of the amount being prepaid. If the Issuer elects to prepay a portion of the outstanding principal and accrued but unpaid interest, then in no event can such prepayment be for an amount less than $1.0 million.

The various equity interests that were assigned by the Company to the Issuer on or about the closing date of the original financings continue to serve as collateral for the repayment of the Multiple Advance Note as do all of the issued and outstanding capital stock of the Issuer owned by the Company, and the 320,000 Trust Preferred Securities, held by the Issuer.

On June 2, 2026, Contrail entered into a subordinated promissory note with OCAS, Inc. ("OCAS"), the former minority owner of Contrail, in the amount of $3.5 million ("Term Loan - OCAS II") with an economic effective date of April 1, 2026. The note was made pursuant to Contrail's purchase and redemption of OCAS' 5% membership interest in Contrail. The note matures on April 1, 2029 and bears interest at an annual rate equal to the ten year Treasury bond yield plus 2.50% which is compounded monthly on the basis of a 365-day year for the actual number of days elapsed. The rate adjusts on each anniversary date of the note.

On June 15, 2026, Air’Zona Aircraft Services, Inc., CSA Air, Inc., Global Ground Support, LLC, Jet Yard, LLC, Jet Yard Solutions, LLC, Mountain Air Cargo, Inc., Worldwide Aircraft Services, Inc., Royal Aircraft Services, LLC and Worthington Aviation, LLC, each a subsidiary or affiliate of the Company (collectively, the “Alerus Loan Parties”), entered into Amendment No. 6 to Credit Agreement with Alerus Financial, National Association (“Alerus”), as lender. In connection with Amendment No. 6, the Alerus Loan Parties executed an Overline Note with Alerus in the original principal amount of $2.8 million (the “Overline Note”). The Overline Note bears interest at a fluctuating annual rate equal to the greater of 5.00% or 1-month term SOFR plus 2.50% and matures on the earlier of October 15, 2026 or the termination of the overline commitment in accordance with the Alerus Credit Agreement.

The following table provides certain information about the current financing arrangements of the Company and its subsidiaries (other than related party obligations) as of June 30, 2026 and March 31, 2026:

(In Thousands)June 30,
2026		March 31,
2026		Maturity DateInterest RateUnused commitments as of June 30, 2026Type of Debt
Air T Debt
Debt - Air T Funding Trust Preferred Securities2$39,535 $38,719 6/7/20498.00%Recourse
Total39,535 38,719 
Alerus Loan Parties Debt
Revolver - Alerus10,654 10,545 8/28/2027
Greater of 5.00% or 1-month SOFR + 1.90%
$9,346 Recourse
Overline Note - Alerus2,800 — 10/15/2026
Greater of 5.00% or 1-month SOFR + 2.50%
— Recourse
Term Note A - Alerus7,912 8,295 8/15/2029
Greater of or 1-month SOFR + 2.00%
Recourse
Term Note C - Alerus888 925 5/15/2030
Greater of 5.00% or 1-month SOFR + 2.25%
Recourse
Total22,254 19,765 
Contrail Debt
Revolver - Alerus11,601 8,181 11/24/2027
1-month SOFR + 3.11%
3,399 Limited recourse3
Term Loan - OCAS II3,535 — 4/1/2029
10-YR Treasury Yield + 2.50%
Non-recourse
Term Loan - OCAS I547 — 11/28/2026
10-YR Treasury Yield + 2.50%
Non-recourse
Total15,683 8,181 
Wolfe Lake Debt
Term Loan - Bridgewater8,706 8,778 12/2/20313.65%Non-recourse
Total8,706 8,778 
ATA 22.1 Debt
Term Loan - Alerus6,000 6,000 11/24/2032
Greater of 5.00% or CME 1-month SOFR + 1.90%
Non-recourse
Term Loan A - ING513 690 2/1/20273.50%Non-recourse
Term Loan B - ING1,141 1,150 5/1/20274.00%Non-recourse
Total7,654 7,840 
AAM 24-1 Debt
Promissory Notes - Institutional Investors75,000 60,000 5/31/20358.50%Non-recourse
Total75,000 60,000 
MAC Debt
Term Loan - Bank of America, N.A.2,128 2,157 2/21/2030
1-month SOFR + 0.11% + 1.75%
Non-recourse
Total2,128 2,157 
Rex Debt
Term Loan - Commonwealth24,899 23,842 11/11/2054—%Non-recourse
Line of Credit - Commonwealth11,600 — 12/17/203212.00%29,614 Non-recourse
Total36,499 23,842 
3 Includes Air T's guarantee of approximately $2.0 million.
ATA 25.1 Debt
Term Note - Institutional Investors41,301 41,271 12/15/203111.50%Recourse
Total Debt248,760 210,553 
Unamortized Premiums and Debt Issuance Costs(2,424)(2,357)
Total Debt, net$246,336 $208,196 
At June 30, 2026, our contractual financing obligations, including payments due by period, are as follows (in thousands):
Due byAmount
June 30, 2027$9,046 
June 30, 202826,388 
June 30, 20294,227 
June 30, 20306,726 
June 30, 20311,197 
Thereafter201,176 
248,760 
Unamortized Premiums and Debt Issuance Costs(2,424)
$246,336 
Net interest expense (income) for the Company and its subsidiaries was as follows for the three months ended June 30, 2026 and 2025:
Three Months Ended
June 30,
20262025Change
Rex$1,428 $— $1,428 
ATA 25.1 (Rex's parent entity)1,192 — 1,192 
Air T Funding Trust Preferred Securities1,372 711 661 
AAM 24-11,021 699 322 
Other59 14 45 
Alerus Loan Parties371 371 — 
Wolfe Lake82 83 (1)
MAC13 38 (25)
Contrail231 309 (78)
ATA 22.1 (96)89 (185)
Total$5,673 $2,314 $3,359 
Cash paid for interest totaled $5.5 million and $2.3 million during the three months ended June 30, 2026 and 2025, respectively.