CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings and Rating Outlooks to GTP Acquisition Partners I, LLC's American Tower secured revenue notes series 2015-1 and 2015-2 transaction:
--$350,000,000 series 2015-1 class A 'AAAsf'; Outlook Stable;
--$525,000,000 series 2015-2 class A 'AAAsf'; Outlook Stable.
The transaction is an issuance of notes backed by mortgages representing approximately 94% of the annualized run rate (ARR) net cash flow (NCF) and guaranteed by the parent of the borrower. Those guarantees are secured by a pledge and first-priority-perfected security interest in 100% of the equity interest of the borrower (which owns or leases 3,621 wireless communication sites) and of its direct parent, respectively. The notes will be issued pursuant to an indenture dated as of March 2011 as amended and restated at closing of the series 2015 transaction.
KEY RATING DRIVERS
Low Leverage: Fitch's NCF on the pool is $174.7 million, implying a Fitch stressed debt service coverage ratio (DSCR) of 2.16x. The debt multiple relative to Fitch's NCF is 5.0x, which equates to a debt yield of 20.0%.
Institutional Sponsorship: The issuer, GTP Acquisition Partners I, LLC, is wholly owned by American Tower Corporation (AMT; rated 'BBB'/Outlook Negative), a leading independent owner of wireless tower sites that currently operates more than 91,000 sites in the U.S. (40,000+ sites), Brazil, Chile, Colombia, Germany, Ghana, India, Mexico, Peru, Costa Rica, South Africa, and Uganda.
Strong Historical Performance: NCF from the original collateral has increased approximately 15% since the 2013-1 issuance primarily due to the contractual rent increases, fixed-cost base structure, and organic growth through escalations and lease-ups.
Amortization Post-ARD: The notes will be structured as interest only until the anticipated repayment date (ARD). 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. Based on actual NCF, the longest tenor notes would fully amortize three years after the ARD (or 13 years from closing).
RATING SENSITIVITIES
Fitch performed several stress scenarios in which Fitch's NCF was stressed. Fitch determined that an 84.6% 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 for classes 2015-1 and 2015-2, and a 14.6% decline in NCF would result in a one-category downgrade, while a 38.5% 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.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Criteria for Analyzing U.S. Wireless Tower Transactions (pub. 27 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863223
Global Structured Finance Rating Criteria (pub. 31 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268
Additional Disclosures
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985599
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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