A deal backed by multiple assets and ownership interests in 37 multi-use communication tower sites called Richland Towers, LLC Secured Multi-Use Communication Tower Revenue Notes, Series 2011-1 is in the market.
The $188 million offering is divided as follows: $143,000,000 class A notes and $45,000,000 class B notes.
These sites are for transmitting broadcast signals for television, FM radio, land mobile radio, wireless communication equipment, and other related purposes, according to a Fitch Ratings presale report released today.
The notes are issued by the asset entities' direct owners and are backed mostly by mortgages on the interests of the asset entities in tall tower communication sites, which represent no less than 91.9% of the net cash flow, the rating agency indicated.
According to Fitch, the notes are guaranteed by the asset entities' direct and indirect owners and are secured by a pledge as well as the first priority perfected security interest in 100% of the issuers and the asset entities' equity interest.
Meanwhile, the rating firm said that the ownership interests in the tall tower communication sites comprise fee simple, leasehold, and management agreements in land, rooftop, or other structures where the site space is allocated to communication lessees, independent tower operators, as well as other users pursuant to leases or licenses for placement of the tenants’ tower communication equipment and other purposes, Fitch said. It added that both the direct and indirect parents of the asset entities are SPEs.
The deal's proceeds are for refinancing the debt outstanding under existing financing and for general corporate purposes.
On the closing date, a portion of the proceeds (equivalent to $5 million) will be deposited into a site acquisition account, Fitch said. The issuers expect to use the funds to buy added tall tower communication site assets in the 12-month acquisition period that starts after the closing date. A yield maintenance reserve account has also been established to cover interest payments on the amounts in the site acquisition account during the 12-month acquisition period.
Hearst Television, a wholly owned subsidiary of Hearst Corp., is a tenant in occupancy at three of the collateral tower site assets and represents roughly 2.2% of the annualized run rate revenue, Fitch said.
