Fitch Assigns Final Ratings to SBA Tower Trust Series 2014-1C & Series 2014-2C

CHICAGO--()--Fitch Ratings has assigned the following ratings and Rating Outlooks to the SBA Tower Trust Secured Tower Revenue Securities series 2014-1C and series 2014-2C transaction:

--$920,000,000 class 2014-1C 'Asf'; Outlook Stable;

--$620,000,000 class 2014-2C 'Asf'; Outlook Stable.

The 2014-1C and 2014-2C classes are pari passu with the 2010-2C, 2012-1C, 2013-1C and 2013-2C classes.

The transaction is an issuance of notes backed by mortgages representing more than 96% of the annualized run rate net cash flow (NCF) and guaranteed by the parent of the borrowers. Those guarantees are secured by a pledge and first-priority-perfected security interest in 100% of the equity interests of the borrowers (which own or lease 9,545 wireless communication sites) and of the direct parent, respectively. Both the direct and indirect parents of the borrowers are special purpose entities.

The ratings reflect a structured finance analysis of the cash flows from the ownership interest in cellular sites, not an assessment of the corporate default risk of the ultimate parent, SBA Communication Corporation (SBA).

KEY RATING DRIVERS

Trust Leverage: Fitch's NCF on the pool is $537.3 million, implying a Fitch stressed debt service coverage ratio (DSCR) of 1.44x. The debt multiple relative to Fitch's NCF is 7.5x, which equates to a debt yield of 13.3%. The $3.7 billion 'Asf' rated notes have a Fitch stressed DSCR, debt multiple and debt yield of 1.57x, 6.89x, and 14.5%, respectively.

Leases to Strong Tower Tenants: There are 21,418 wireless tenant leases. Telephony tenants represent 96.3% of the leases on the cellular sites, and 52.1% of the annualized run rate revenue (ARRR) is from investment-grade tenants. The tenant leases have weighted average annual escalators of approximately 3.6% and a weighted average final remaining term (including renewals) of 18.9 years. The largest tenant, AT&T (34.2% of ARRR) is rated investment grade by Fitch (long-term IDR of 'A' with a Negative Outlook).

RATING SENSITIVITIES

Fitch performed several stress scenarios in which Fitch's NCF was stressed. Fitch determined that a 74% reduction in NCF would cause the notes to break even at 1.0x DSCR on an interest-only basis.

Fitch evaluated the sensitivity of the ratings for classes 2014-1C and 2014-2C, and a 10% decline in NCF would result in a one-category downgrade, while an 18% 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.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria', August 2014;

--'Criteria for Analyzing U.S. Wireless Tower Transactions', December 2013;

Applicable Criteria and Related Research

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria', August 2014;

--'Criteria for Analyzing U.S. Wireless Tower Transactions', December 2013.

Applicable Criteria and Related Research:

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=754389

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=898815

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
Adam Ott
Director
+1 312-368-2094
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Secondary Analyst
David Ro
Director
+1 312-368-3132
or
Committee Chairperson
Robert Vrchota
Managing Director
+1 312-368-3336
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Adam Ott
Director
+1 312-368-2094
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Secondary Analyst
David Ro
Director
+1 312-368-3132
or
Committee Chairperson
Robert Vrchota
Managing Director
+1 312-368-3336
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com