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S&P rates SBA Communications notes B-
Standard & Poor's said it assigned a B- rating and 6 recovery rating to SBA Communications Corp.'s proposed $300 million senior unsecured notes issue.
The 6 recovery rating indicates 0% to 10% expected recovery in a default.
The proceeds will be used to partially fund the cash portion of the TowerCo acquisition, which is expected to close before the end of 2012, S&P said.
The agency also affirmed the company's B+ corporate credit rating, BB issue-level rating on the secured credit facilities at SBA Senior Finance II LLC and the B+ issue-level rating at intermediate holding company SBA Telecommunications Inc.
The 1 recovery rating on the secured credit facilities indicates 90% to 100% expected recovery and the 4 recovery rating reflects 30% to 50% expected recovery in a default. Both remain unchanged.
Leverage will rise as a result of this transaction, but S&P said it believes the combined company's solid cash flow generation will enable leverage to decline in 2013 to around the low-8x area.
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