American Tower's debt is rebuilding in the market, hitting 96-98 from the 94 range. There was a report of a $2.5 million trade in the 96 3/8 range late Tuesday. One dealer attributed the support in levels to technicals, but said the outlook on telecom credits remains mixed. Tower credits recently stumbled in the aftermath of the telecom problems and lowered projections on the use of tower space. The Boston-based company operates 13,600 broadcast and telecommunications towers. Joseph Winn, cfo, has said demand for the company's towers has been solid. He did not return calls for comment on the latest levels.
The debt took a hit in early November, trading as low at 88, when the company announced there would be less demand for tenant space in the fourth quarter (LMW, 11/11). Since then it has slowly ticked back up. "In that sector, the names that will pull through most likely are American Tower and Crown Castle," a dealer predicted. Others estimate that demand for towers will keep up as long as there's cell phone use. American Tower has a $2 billion credit that breaks down into three tranches and expires in 2008. Pricing is LIBOR plus 3 1/4%. TD Securities, Bank of New York, J.P. Morgan, and Credit Suisse First Boston are the lead arrangers.