MTR recommends buying SBA Communications 10.25%, 12% notes

New York, Aug. 5 - Miller Tabak Roberts Securities LLC is recommending investors buy SBA Communications' 12% senior discount notes due 2008 and 10.25% senior notes due 2009.

The brokerage firm says that if SBA achieves free cash flow the notes will trade at a "substantial premium" to current prices. And even if the tower operator ends up in Chapter 11 bondholders should still achieve a better than 10% yield, according to MTR.

"With the acquisition phase of the tower industry largely completed, SBA has established an enviable footprint in prime geographic areas and is well-positioned to benefit as the lease-up phase takes hold," said MTR senior analyst Michael Renoff.

"Even if we assume flattening growth in new site development and a slowing rate of new subscriber sign-ups in the short term, SBA's cash flow should be adequate to meet capital expenditure and 3G-related expansion requirements."

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