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SBA plans $900 million bridge loan for purchase of TowerCo assets
By Sara Rosenberg
New York, June 26 - SBA Communications Corp. has received a commitment for a $900 million two-year bridge loan to help fund its acquisition of 3,252 tower sites from TowerCo, company officials said in a conference call on Tuesday.
J.P. Morgan Securities LLC is the lead bank on the debt.
Pricing on the bridge loan is Libor plus 350 basis points.
Officials said that the refinancing plan for the bridge loan encompasses multiple debt markets and provides flexibility to move opportunistically depending on conditions in the markets the company opts to pursue.
Traditionally, the company has used secured debt up until six turns of leverage and high-yield debt when leverage is above that, officials remarked. Based on current rates, the blended interest rate on the debt is expected to be 5% or below.
Pro forma net debt leverage is anticipated to be in the range of 7.8 times to 8 times at closing. It is expected that leverage will be brought down to the target area of 7 times to 7.5 times in under a year without the issuance of any more equity to delever, officials added.
Under the agreement, SBA is buying the assets for $1.2 billion in cash and 4.6 million shares of class A common stock, implying a total transaction value of $1.45 billion.
In addition to the bridge loan, the cash consideration will be paid from a combination of cash on hand and existing credit facilities.
Closing on the transaction is expected in the fourth quarter, subject to customary conditions.
The TowerCo assets are estimated to produce about $93 million to $95 million in tower cash flow for the full calendar year 2013.
SBA is a Boca Raton, Fla.-based provider and owner and operator of wireless communications infrastructure.
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