US towerco SBA Communications has priced US$500m of 30-year secured tower revenue securities, backed by a mortgage loan, to help repay a corporate revolver and for general corporate purposes.
US towerco SBA Communications (NASDAQ:SBAC) has priced US$500m of 30-year secured tower revenue securities.
The ‘series 2015-1 securities’ have an anticipated repayment date in October 2020 and mature in October 2045, the Florida-based company said in a statement.
They have an interest rate of 3.156% per year and will be issued by indirect subsidiary SBA Trust, guaranteed by SBA Guarantor and SBA Holdings.
Moody’s, which rated the offering (P)A2, noted that a mortgage loan to the borrowers will back the securities. As part of the issuance, the mortgage loan amount will increase by US$500m to US$4.53bn. One component of the mortgage loan corresponds to the new securities. The borrowers will use cash flows from tower leases to repay the mortgage loan and the new securities.
Proceeds from the new offering will be used to make a cash distribution to SBA Guarantor, which will redistribute the funds to other SBA entities to repay drawn amounts on SBA Senior Finance II’s revolving credit facility and for general corporate purposes.
The offering is expected to close on about 14 October.
SBA owns and operates wireless communication infrastructure in North, Central and South America, generating revenue from site leasing and site development services. Its main focus is leasing antenna space on its multi-tenant towers to wireless service providers.
Moody’s noted that the borrowers own or lease 10,590 tower sites which, as of September 2015, had an annualised run rate net cash flow of some US$631m.
Barclays, Citigroup, Deutsche Bank, JP Morgan, Mizuho, TD Securities and Wells Fargo worked on the offering.
Last December, SBA bought 1,641 mobile towers in Brazil from local telco Oi for R$1.172bn (US$457m) through its local unit SBA Torres, adding to its existing 7,000 towers in the country.
In April, SBA president and CEO Jeffrey Stoops (pictured) said the company intends to expand further in Brazil, despite the weak economic climate in the country. Its focus for the rest of this year, he said, will be on new builds and smaller acquisitions. He added that the company will also look domestically and in other foreign markets, particularly in the Western Hemisphere, for “attractive” investment opportunities.
