American Tower's levels continue to hover in the low 90s range as $10 million of the bank debt traded this week at 91 1/2. Dealers said they expect the credit will soften further as tower companies begin to feel the effects of a weak telecommunications industry. Joseph Winn, cfo, said, the company has seen good strength in the paper and solid demand on its towers. "The tower companies have been reporting strong organic growth." Winn said. "Concerns around this paper have been due to leverage or debt. We've been supported for a long time in this marketplace, we're going to do just fine."
Last week the credit traded down to 91, then landed at 89. "It's trading down purely on technicals," said a dealer, explaining an uneven balance of buyers and sellers. "The whole sector's been beaten down." The Boston-based company operates more than 14,000 broadcast and communications towers.
American Tower's levels first took the hit last week because the company announced projections that there will be less demand for tenant space in the upcoming quarter (LMW, 11/11). The company has a $500 million credit facility that expires in 2008. Pricing is LIBOR plus 3 ¼%. TD Securities, Bank of New York, J.P. Morgan and Credit Suisse First Boston are the lead arrangers.