Insight Wireless Group is marketing $177.5 million of securities backed by mortgages on cellular towers, according to a presale report issued by Fitch Ratings.
Deutsche Bank Securities is the structuring agent and underwriter.
The transaction consist of $123.9 million of notes with a preliminary, ‘BBB’ rating and credit enhancement of 29.2%; $39.6 million of ‘BB-‘ rated notes; and $14 million of unrated notes.
Fitch said it took into account the deal’s strong tower tenants in its ratings. There are 1,236 wireless tenant leases: telephony tenants represent 74.8% annualized run rate revenue (ARRR), and 48.9% of the ARRR is from investment-grade tenants. Tenant leases on the cellular sites have average annual escalators of approximately 3.1% and an average final remaining term (including renewals) of 21.1 years
Fitch also cited as a risk the fact that 14% of total proceeds, or $25.357 million, will be used to fund the acquisition of future tower cites over a 12-month period. It said this prefunding introduces uncertainty as to final collateral characteristics.
InSite is a small, nonpublic company. Prior to this issuance, it financed operations and site acquisitions with a secured debt facility led by Goldman Sachs Specialty Lending Group; a portion of proceeds from this issuance will be used to terminate the existing facility.