AAT Communications Corp. attracted 51 additional lenders to its new $325 million credit facility, and in the process got better pricing, more flexible covenants and extended maturities than its previous line. "It's a reflection of our strong performance [and] the market we are in," said Mary Meduski, executive v.p. and cfo at AAT.
The new deal comprises a $200 million "B" loan, $75 million delayed-draw "A" loan and $50 million revolver. The spread on the "B" tranche is LIBOR plus 2 3/4%. The previous facility, which is being refinanced, consisted of a $185.5 million term loan priced at LIBOR plus 3 3/4% and a $25 million revolver. Additionally, AAT's new facility expires in 2011, two years later than the previous one. The remaining availability will be used for tower acquisitions, building of new towers and general corporate purposes.
AAT's ratings, performance, growth and tower acquisitions were cited by Meduski as reasons for the improvement in borrowing conditions and pricing. Additionally, according to Meduski, the strength of the institutional bank market caused the company to have a book that was three times oversubscribed with more than $600 million raised on the institutional tranche. In comparison, the previous deal was put in place in 2002 in a relatively bad market for telecommunications finance and had a number of restrictions, Meduski said. The new deal is more market driven in terms of the covenants with a higher leverage covenant and no mortgage requirement. In the previous deal AAT had to provide mortgages on 70% of its towers, Meduski said.
TD Securities and Credit Suisse First Boston lead the new facility. Only TD led the previous loan. TD and CSFB's knowledge of the telecommunications market, experience and service were cited by Meduski as factors that determined the company's decision. "We engaged in a competitive process and we selected the lead banks [that] we thought would do the best joband they did," she said. All of the existing lenders stayed in.