A series of credits for wireless and tower companies are hitting the market amid strong investor sentiment for the revitalized sectors. SBA Senior Finance, a subsidiary of SBA Communications Corp., is said to be oversubscribed after Lehman Brothers and Deutsche Bank launched syndication last week. TD Securities and J.P. Morgan are also in the market with pricing cut on American Tower Corp.'s $267 million "B" loan that knocks 1% off the pricing, now at LIBOR plus 21Ž2%. In addition, Credit Suisse First Boston and Lehman are pitching a $750 million facility for Centennial Communications Corp.
"The whole tower sector has been doing better," said one buysider who plans to invest in the SBA credit. "There was worry when the cell companies were trading in the 70s and 80s. If they had problems then the towers would too. But all the cell companies now trade around par and look healthier," he added.
The $350 million SBA facility comprises a $75 million revolver and $275 million term loan with pricing at LIBOR plus 33Ž4% and LIBOR plus 4%, respectively. The revolver matures in July 2008, while the term loan portion matures in October 2008. Proceeds of the credit will be used to repay borrowings under the company's existing $195 million credit facility and a portion of the proceeds will be used to call the remaining $65.7 million of the company's 12% senior discount notes.
The Centennial facility comprises a seven-year, $600 million "B" loan and a six-year, $150 million revolver. Pricing is LIBOR plus 31Ž4% on both the "B" piece and the revolver. The revolver carries a commitment fee of 50 basis points. "Centennial has returned to very normal leverage ranges for its industry," a loan investor said. "There is reason to be positive about the company." Centennial's borrowings along with proceeds from a note offering will be used to refinance the company's existing credit facility and fund the repurchase of all of the company's outstanding unsecured subordinated notes. Centennial officials, Mike Sullivan, SBA's interim cfo, and Bradley Singer, cfo of American Tower, did not return calls.