S&P rates SBA notes BB-

S&P said it rated SBA Communications Corp.’s planned $1.5 billion of senior unsecured notes due 2029 BB- with a 5 recovery rating. The 5 recovery rating indicates an estimated modest (10%-30%; rounded estimate: 10%) recovery in default.

Proceeds will be used to repay the $750 million of its 4% senior unsecured notes due 2022 that remain outstanding and the $380 million of borrowings under its $1.25 billion revolving credit facility due in 2023, pay related fees and expenses and for general corporate purposes.

The BB- issue-level rating and 5 recovery rating on the company’s senior unsecured debt is unchanged. “Although the recovery rating remains 5, the additional senior unsecured debt somewhat reduces recovery prospects for unsecured creditors because of the higher amount of debt outstanding. As a result, we expect to revise our rounded recovery estimate for the senior unsecured debt to about 10% once the transaction is complete,” S&P said in a press release.

Since the new notes won’t materially hurt SBA’s credit metrics, S&P said it left the company’s BB issuer rating and stable outlook unchanged.

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