CHICAGO--()--Fitch Ratings has issued a presale report on American Tower Trust I Secured Tower Revenue Securities, series 2013-1A and series 2013-2A.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$500,000,000 class 2013-1A 'AAAsf'; Outlook Stable,
--$1,300,000,000 class 2013-2A 'AAAsf'; Outlook Stable.
The expected ratings are based on information provided by the issuer as of March 1, 2013. The allocation of the deal balance between each class has not been finalized at this time. For purposes of the presale report Fitch assumed the allocation listed above.
The transaction is an issuance of notes backed by mortgages representing over 86% of the annualized run rate net cash flow (NCF) and guaranteed by the direct parent of the borrowers. Those guarantees are secured by a pledge and first priority perfected security interest in 100% of the equity interest of the borrowers, which own or lease 5,195 wireless communication sites, and of its direct parent, respectively. Both the direct and indirect parents of the borrowers are special purpose entities.
Key Rating Drivers
Low Leverage: Fitch Ratings' NCF on the pool is $392.3 million, implying a Fitch stressed debt service coverage ratio (DSCR) of 2.36x. The debt multiple relative to Fitch's NCF is 4.59x, which equates to a debt yield of 21.8%.
Institutional Sponsorship: American Tower Corporation (rated 'BBB-', Outlook Stable) is a leading independent owner of wireless tower sites and currently operates over 54,000 towers throughout the United States, Brazil, Chile, Colombia, Germany, Ghana, India, Mexico, Peru, South Africa and Uganda.
Strong Historical Performance: NCF from the existing collateral has increased approximately 81.8% since the 2007-1 issuance due to the contractual rent increases, fixed-cost base structure, and organic growth.
Amortization Post-ARD: The notes will be structured as interest only until the anticipated repayment date (ARD). If the notes are not able to refinance on or prior to the ARD for that series, all excess cash flow will be swept to pay down the outstanding principal balance. Based on actual NCF, the notes would fully amortize three years after the ARD (or 13 years from closing).
Fitch performed several stress scenarios in which Fitch's NCF was stressed. Fitch determined that an 88.2% reduction in Fitch's NCF would cause the notes to break even at 1.0x DSCR on an interest-only basis. Fitch evaluated the sensitivity of the ratings and a 16% decline in NCF would result in a one category downgrade to 'AAsf', while a 42% decline would result in a downgrade to below investment-grade. The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities.
The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria', June 6, 2012;
--'Criteria for Analyzing U.S. Wireless Tower Transactions', Dec. 4, 2012;
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', May 30, 2012.
Applicable Criteria and Related Research American Tower Trust I (US CMBS)
Global Structured Finance Rating Criteria
Criteria for Analyzing U.S. Wireless Tower Transactions
Criteria for Special-Purpose Vehicles in Structured Finance Transactions