American Tower's levels took a hit following a disappointing third-quarter earnings release that indicated demand for cell tower use will diminish in the coming year. The "B" paper dropped down a point to 91 immediately after the release, then landed in the 89 range. American Tower is based in Boston. Calls to Joseph Winn, cfo, were not returned by press time. Calls to spokeswoman Ann Alter also were not returned.
As telecom credits have suffered in a slowing economy, tower credits were said to be holding up. "Tower credits are viewed to have assets and are a critical component of a healthy wireless sector," a trader noted. Still, dealers acknowledged tower names could be following other segments of the sector in feeling decreasing demand. "Their outlook for the future has been diminished. It's becoming a more difficult business: Guys who planned on having four or five tenants per tower, now have just three," a dealer said. "There's been a lot less demand for towers and the whole sector is trading down because of technicals."
Late last month TD Securities, Credit Suisse First Boston, Bank of New York and J.P. Morgan were looking to complete a club-style syndication of a $300 million delayed-draw term loan add-on for American Tower (LMW, 10/28). The company has received $250 million in commitments so far, as announced in its third-quarter release on Nov. 6.