Fitch Affirms American Tower Trust, Series 2013-1A and 2013-2A

NEW YORK--()--Fitch Ratings has affirmed the American Tower Trust commercial mortgage pass-through certificates, series 2013-1A and 2013-2A as follows:

--$500 million 2013-1A class at 'AAAsf', Outlook Stable;

--$1.3 billion 2013-2A class at 'AAAsf', Outlook Stable;

KEY RATING DRIVERS

The affirmations are due to the stable performance of the collateral since issuance. In addition to low leverage, Fitch's ratings of 'AAAsf' for this transaction are a result of exceptionally strong tenant, collateral, portfolio, sponsorship, and transaction attributes. Consistent with Fitch's published U.S. wireless criteria for 'AAAsf' ratings, the debt is expected to fully amortize over the first 15 years of the transaction.

SENSITIVITY

The classes are expected to remain stable based on continued cash flow growth due to annual rent escalations and automatic renewal clauses resulting in higher debt service coverage ratios since issuance. Additionally, cash flow continues to grow with the addition of new tenants to existing tower sites.

As of the January 2014 distribution date, the aggregate principal balance of the notes remains unchanged from issuance at $1.8 billion. As part of its review, Fitch analyzed the financial and site information provided by the master servicer, Midland Loan Services. As of January 2014, aggregate annualized run rate net cash flow (NCF) increased 8.4% from issuance to $451.2 million with a Fitch stressed debt service coverage ratio (DSCR) increasing to 2.59x from 2.36x at issuance.

The tenant type concentration is stable. As of January 2014, total revenue contributed by telephony tenants was 94.5%. Lease revenues from telephony tenants have more stable income characteristics than other tenant types due to the strong end-use customer demand for wireless services.

The transaction is an issuance of notes backed by mortgages representing over 86% of the annualized run rate 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.

The series 2013-1A and series 2013-2A notes are interest-only until their respective anticipated repayment date (ARD). No other principal will be required to be paid prior to the anticipated repayment date of the applicable series, which is in March 2018 for the 2013-1A class and March 2023 for the 2013-2A class. If the notes are not able to be refinanced on or prior to the ARD for that series, all excess cash flow will be swept to pay down the outstanding principal balance.

Additional information on Fitch's criteria for analyzing U.S. Wireless Tower Transactions is available in the Dec. 3, 2013 report, 'Criteria for Analyzing U.S. Wireless Tower Transactions,' which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Criteria for Analyzing U.S. Wireless Tower Transactions' (Dec. 3, 2013);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 20, 2013).

Applicable Criteria and Related Research:

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

Criteria for Analyzing U.S. Wireless Tower Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724675

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=822126

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst:
David Ro, +1-312-368-3132
Associate Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst:
David Ro, +1-312-368-3132
Associate Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com