SBA Communications Corporation (NASDAQ:SBAC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
Issuance of 2017-1 Tower Securities
On April17, 2017, to the terms of a Purchase Agreement (the
Purchase Agreement) by and among SBA Senior Finance, LLC, an
indirect subsidiary of SBA Communications Corporation (the
Company), Deutsche Bank Trust Company Americas, as trustee (the
Trustee), and Barclays Capital Inc., Citigroup Global Markets
Inc. and Deutsche Bank Securities Inc., as representatives of the
several initial purchasers named on Schedule I thereto (the
Initial Purchasers), SBA Tower Trust (the Trust), a New York
common law trust established by SBA Depositor LLC, an indirect
subsidiary of the Company (SBA Depositor), issued, and the
Initial Purchasers purchased, $760million principal amount of
Secured Tower Revenue Securities, Series 2017-1C (the 2017-1C Tower
Securities).
The 2017-1C Tower Securities have
an anticipated repayment date of April11, 2022, a final maturity
date of April9, 2047 and an interest rate of 3.168% per annum.
The 2017-1C Tower Securities are guaranteed by SBA Guarantor LLC
(SBA Guarantor), SBA Holdings LLC, SBA GC Holdings, LLC, SBA GC
Parent I, LLC and SBA GC Parent II, LLC, each an indirect
subsidiary of the Company.
The net proceeds from this
offering were approximately $750.7 million, after deducting
initial purchasers discounts and expenses. Net proceeds from this
offering were used to make a cash distribution to SBA Guarantor
which further distributed or contributed such amount to one or
more other SBA entities to be used (1)to prepay $611.6million
aggregate principal amount, including accrued and unpaid
interest, of the Secured Tower Revenue Securities, Series 2012-1C
(the 2012-1C Tower Securities) and (2)for general corporate
purposes.
To satisfy the applicable risk
retention requirements of Regulation RR promulgated under the
Securities Exchange Act of 1934, as amended (the Risk Retention
Rules), the Trust issued, and SBA Guarantor, an affiliate of SBA
Depositor, purchased, $40million principal amount of Secured
Tower Revenue Securities, Series 2017-1R (the Retention
Securities and, together with the 2017-1C Tower Securities, the
2017-1 Tower Securities) in order to retain an eligible
horizontal residual interest (as defined in the Risk Retention
Rules) in an amount equal to at least 5% of the fair value of the
offered and retained securities. The Retention Securities have an
anticipated repayment date of April11, 2022, a final maturity
date of April9, 2047 and an interest rate of 4.459% per
annum.
Third Loan Supplement and
Amendment to the Loan and Security Agreement
In connection with the
issuance of the 2017-1 Tower Securities, the parties entered into
a Third Loan and Security Agreement Supplement and Amendment,
dated April17, 2017 (the Third Loan Supplement and Amendment),
which supplemented and amended the Second Amended and Restated
Loan and Security Agreement, dated October15, 2014 (the Loan and
Security Agreement). The Third Loan Supplement and Amendment was
entered into by SBA Properties, LLC, SBA Sites, LLC, SBA
Structures, LLC, SBA Infrastructure, LLC, SBA Monarch Towers III,
LLC, SBA 2012 TC Assets PR, LLC, SBA 2012 TC Assets, LLC, SBA
Towers IV, LLC, SBA Monarch Towers I, LLC, SBA Towers USVI, Inc.,
SBA GC Towers, LLC, SBA Towers VII, LLC, SBA Towers V, LLC, and
SBA Towers VI, LLC (the Borrowers) and Midland Loan Services, a
Division of PNC Bank, National Association, as servicer on behalf
of the Trustee.
to the Third Loan Supplement
and Amendment, among other things, (i)the outstanding principal
amount of the mortgage loan was increased by $800million (or by a
net of $190million after giving effect to the prepayment of the
2012-1C Tower Securities) and (ii)the Borrowers became jointly
and severally liable for the aggregate $4.87billion borrowed
under the mortgage loan (the Mortgage Loan) corresponding to the
2013-1C Tower Securities, 2013-2C Tower Securities, 2013-1D Tower
Securities, 2014-1C Tower Securities, 2014-2C Tower Securities,
2015-1C Tower Securities, 2016-1C Tower Securities, and the newly
issued 2017-1 Tower Securities (together the Tower Securities).
In addition, the Third Loan Supplement and Amendment modified the
Loan and Security Agreement to reflect that the Retention
Securities (1)are excluded for purposes of calculating the
coverage ratios, (2)are not subject to certain covenants,
including additional prepayment consideration and interest, and
(3)will not subject to an event of default if not repaid by the
due date.
The Mortgage Loan is the sole
asset of the Trust. The aggregate principal amount of the loan
components outstanding under the Mortgage Loan is $4.87billion,
comprised of (1)the $425million loan component with the same
terms and conditions as the 2013-1C Tower Securities, (2)the
$330million loan component with the same terms and conditions as
the 2013-1D Tower Securities, (3)the $575million loan component
with the same terms and conditions as the 2013-2C Tower
Securities, (4)the $920million loan component with the same terms
and conditions as the 2014-1 Tower Securities, (5)the $620million
loan component with the same terms and conditions as the
2014-2 Tower
Securities, (6)the $500million loan component with the same terms
and conditions as the 2015-1C Tower Securities, (7)the
$700million loan component with the same terms and conditions as
the 2016-1C Tower Securities, (8)the $760million loan component
with the same terms and conditions as the 2017-1C Tower
Securities and (9)the $40million loan component with the same
terms and conditions as the Retention
Securities.
The Mortgage Loan underlying
the Tower Securities is to be repaid from the operating cash
flows from the aggregate 10,453 tower sites owned by the
Borrowers. The Mortgage Loan is secured by (1)mortgages, deeds of
trust and deeds to secure debt on a substantial portion of the
tower sites, (2)a security interest in the towers and
substantially all of the Borrowers personal property and
fixtures, (3)the Borrowers rights under tenant leases, and (4)all
of the proceeds of the foregoing. For each calendar month, SBA
Network Management, Inc., an indirect subsidiary of the Company,
is entitled to receive a management fee for its services as
manager equal to 4.5% of the Borrowers operating revenues for the
immediately preceding calendar month.
The Borrowers may prepay the
$760million loan corresponding to the 2017-1C Tower Securities
with no prepayment consideration (1)within twelve months of the
anticipated repayment date, (2)with proceeds received as a result
of any condemnation or casualty of any tower owned by the
Borrowers or (3)during an amortization period. In all other
circumstances, the Borrowers may prepay the $760million loan, in
whole or in part, upon payment of the applicable prepayment
consideration. The prepayment consideration consists of an amount
equal to the excess, if any, of (i)the present value associated
with the portion of the principal balance of the $760million loan
being prepaid, calculated in accordance with the formula set
forth in the Third Loan Supplement and Amendment, on the date of
prepayment of all future installments of principal and interest
required to be paid from the date of prepayment to and including
the first due date within twelve months of the anticipated
repayment date of the 2017-1C Tower Securities over (ii)that
portion of the principal balance prepaid on the date of such
prepayment.
To the extent that the loan
corresponding to the 2017-1C Tower Securities is not fully repaid
by the anticipated repayment date, the interest rate will
increase by the greater of (i) 5% and (ii)the amount, if any, by
which the sum of (x)the ten-year U.S. treasury rate plus (y)the
credit-based spread for such component (as set forth in the Third
Loan Supplement and Amendment) plus (z) 5%, exceeds such interest
rate. Except as set forth herein, all other material terms and
conditions of the Mortgage Loan remain
unchanged.
Relationships
The Company and certain of its
affiliates have previously entered into commercial financial
arrangements with each of the Initial Purchasers, and/or their
respective affiliates, and each of these entities and/or its
affiliates has in the past provided financial, advisory,
investment banking and other services to the Company and its
affiliates, including (1)serving as a lender and/or in other
related capacities in connection with the Senior Credit Agreement
and the various term loans and revolving credit facility under
the Senior Credit Agreement and (2)as a book runner and/or as an
initial purchaser for our various series of Secured Tower Revenue
Securities. Certain of the Initial Purchasers or their affiliates
may hold from time to time a portion of the 2012-1C Tower
Securities and, accordingly, may receive a portion of the net
proceeds of this offering. In addition, each of Barclays Capital
Inc., Citigroup Global Markets Inc., Deutsche Bank Securities
Inc., J.P. Morgan Securities LLC, Mizuho Bank, Ltd., Wells Fargo
Securities, LLC, and TD Securities (USA) LLC served as a book
runner and/or an initial purchaser for our various series of
Senior Notes.
Item2.03 Creation of a
Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
The information set forth
under Item 1.01 is incorporated by reference
herein.
Item9.01 Financial
Statements and Exhibits.
| (d) | Exhibits |
|
Exhibit No. |
Description |
|
| 10.12C |
Third Loan and Security Agreement Supplement and Amendment, dated as of April17, 2017, by and among the Borrowers named therein and Midland Loan Services, a division of PNC Bank, National Association, as Servicer on behalf of Deutsche Bank Trust Company Americas, as Trustee. |
About SBA Communications Corporation (NASDAQ:SBAC)
SBA Communications Corporation is an independent owner and operator of wireless communications tower structures, rooftops and other structures that support antennas used for wireless communications. The Company’s operating segments include site leasing and site development. The site leasing business includes segments, domestic site leasing and international site leasing. The Company’s primary business line is its site leasing business. In its site leasing business, the Company leases antenna space to wireless service providers on towers that it owns or operates, and manages rooftop and tower sites for property owners under various contractual arrangements. The Company owns approximately 25,460 towers. It also manages or leases approximately 5,500 actual or potential towers. The Company’s other business line is its site development business, through which it assists wireless service providers in developing and maintaining their own wireless service networks. SBA Communications Corporation (NASDAQ:SBAC) Recent Trading Information
SBA Communications Corporation (NASDAQ:SBAC) closed its last trading session down -0.50 at 123.78 with 873,934 shares trading hands.
