US towerco Crown Castle has completed its US$5.5bn senior unsecured credit facility to refinance existing debt. The new facility, which prompted a ratings upgrade from Moody’s, consists of two revolving credit facilities and a term loan.
US towerco Crown Castle (NYSE:CCI) has completed its US$5.5bn senior unsecured credit facility to refinance existing debt.
The new facility consists of a US$2.5bn revolving credit facility due 21 March 2021, a US$1bn senior unsecured 364-day RCF due 19 January 2017, and a US$2bn senior unsecured term loan A maturing 21 January 2021, the Houston-based company said in a statement.
The facility bears annual interest of Libor plus 1.125% to 2%, based on the company’s senior secured debt rating.
Proceeds, together with cash on hand, were used to repay all outstanding borrowings under an existing senior secured credit facility which, as of 30 September 2015, consisted of a US$2.2bn RCF, of which US$1bn was outstanding, and US$2.9bn of outstanding term loans.
Crown Castle’s full year forecast for interest expenses in 2016 remains at US$517m to US$537m.
Following the towerco’s announcement about the new facility early last week, Moody’s upgraded its senior unsecured rating to Ba1 from Ba3, senior unsecured shelf rating to (P)Ba1 from (P)Ba3 and senior subordinate shelf rating to (P)Ba2 from (P)Ba1. The ratings agency also affirmed its family rating at Ba1 and revised its outlook to positive from stable.
Moody’s said a successful refinancing of the bank facility would significantly alleviate its concerns about the complexity and structural subordination in Crown Castle’s capital structure.
“Moody’s expects [Crown Castle’s] standing as one of the leading operators in the wireless infrastructure industry to support improving credit fundamentals over the rating horizon that could potentially trigger upward ratings movement over time if the real estate investment trust (REIT) maintains its current course of simplifying its capital structure, de-leveraging and liquidity preservation.”
Crown Castle, which operates as a REIT, has a portfolio of some 40,000 towers and 15,000 small cell nodes supported by 16,000 miles of fibre.
