CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed GTP Cellular Sites, LLC commercial mortgage pass-through certificates, series 2012-1 and 2012-2 as follows:
--$95.6 million 2012-1 class A at 'Asf', Outlook Stable;
--$109 million 2012-2 class A at 'Asf', Outlook Stable;
--$41 million 2012-2 class B at 'BBB-sf', Outlook Stable;
--$27 million 2012-2 class C at 'BB-sf', Outlook Stable.
KEY RATING DRIVERS
The affirmations are due to the stable performance of the collateral since issuance with no significant changes to the collateral composition. The Stable Outlooks reflect the limited prospect for upgrades given the provision to issue additional notes.
As part of its review, Fitch analyzed the financial and site information provided by the master servicer, Midland Loan Services. As of November 2015, aggregate annualized run rate net cash flow increased 4.3% from issuance to $33.5 million with a Fitch stressed debt service coverage ratio (DSCR) of 1.21 times (x).
The certificates represent beneficial ownership interest in the cellular sites, primary assets of which are 1,169 wireless communication sites leased to 1,628 cellular tower tenants. As of the November 2015 distribution date, the aggregate principal balance of the notes has been reduced by 3.3% to $272.6 million from $282 million at issuance.
The series 2012-1 class A and series 2012-2 class A notes were interest only for the first year and have commenced amortization expected to total 6% of the total principal amount through year five. No other principal will be required to be paid prior to the anticipated repayment date of the applicable series, which is in March 2017 for 2012-1 class A and March 2019 for the remaining classes.
The tenant type concentration is stable. As of November 2015, total revenue contributed by telephony tenants was 99%. 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.
American Tower Corporation, rated 'BBB' by Fitch, acquired 100% of the outstanding common membership interests of MIP Tower Holdings LLC, a private real estate investment trust, which is the parent company of Global Tower Partners (GTP) and assumed the existing GTP debt in October 2013.
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. The 2012 class A certificates benefit from amortization. The ratings have been capped at 'A' due to the specialized nature of the collateral and the potential for changes in technology to affect long-term demand for wireless tower space. Additional information on rating sensitivity is available in the report 'GTP Cellular Sites, LLC Secured Cellular Sites Revenue Notes, Series 2012-1 and 2012-2' (March 8, 2012), available at www.fitchratings.com.
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.
Criteria for Analyzing U.S. Wireless Tower Transactions (pub. 19 Nov 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Dodd-Frank Rating Information Disclosure Form