SpectraSite Communications has amended its $1.3 billion credit facility to ease covenant pressures as it seeks to restructure a burdensome debt load. The amendment, which required 50% approval from the company's bank group, waives certain potential default events through September of next year and allows the sale of the company's network services and broadcast businesses, according to Tabitha Zane, v.p. of investor relations. "Lazard has been retained as an adviser, although there is no current restructuring proposal out there," Zane said, adding that the Cary, N.C., wireless tower operator simply has too much debt on its books.
The amendment, which was pushed through by original lead lenders CIBC World Markets, Credit Suisse First Boston and TD Securities, did not come without a cost. The interest rate on the loan has been increased by 1/2% until the restructuring is complete, and interest and commitment fees will be due monthly, rather than quarterly, until a restructuring is agreed upon. SpectraSite also will pay an amendment fee of 1/4%.
In addition, the amendment changes the interest-coverage test to make it more restrictive and reduces the size of SpectraSite's revolver by $50 million to $300 million. Zane said the revolver is currently undrawn, but it only has $59 million of availability due to restrictions on the company's debt-to-EBITDA ratios. An undrawn $165 million term loan has been terminated, leaving SpectraSite with a $335 million "A" term loan and a $450 million "B" term loan.
Furthermore, the banks are restricting SpectraSite's ability to incur more indebtedness and make tower acquisitions and investments, Zane said. Capital expenditure has been curtailed so that only $100 million will be spent this year, while projections were for $170-190 million of capex at the beginning of the year, she noted.