Landmark Infrastructure Products is marketing $133.1 million of notes backed by property leased to owners of wireless towers and billboards, according to Fitch Ratings.
Secured Tenant Site Contract Revenue Notes, Series 2016-1 consists of two tranches notes with an expected repayment date of June 2021: $103.9 million of class A notes benefit from credit enhancement of 21.9% and are provisionally rated A- b Fitch and $29.2 million of class B notes are rated BB-.
Proceeds from the notes will be used to refinance a portion of existing indebtedness and for general corporate purposes.
RBC Capital Markets is the structuring agency and underwriter.
The ownership interest in the sites consists of perpetual easements, long-term easements, prepaid leases, and fee interests in land, rooftops, or other structures on which site space is allocated for placement and operation of wireless tower and wireless communication equipment (84% of collateral) and outdoor advertisements (16% of the collateral).
The 796 tenant sites included in this pool represent approximately 35% of all Landmark entity sites.
Among the deal’s strength’s, according to Fitch, is the fact that the portfolio is relatively geographically disbursed over 45 states and Washington D.C.; the largest state, California, accounts for 13.3% of NCF. Investment-grade-rated tenants account for 48.6% of net cash flows. Also, the tenant leases typically have automatic contractual extension options; they have an average remaining lease term of 3.7 years and a fully extended average lease term of 20.7 years.
The largest tenant as a percentage of annualized run rate revenue is T-Mobile (16.2%) followed by AT&T Mobility (13.6%). The four largest tenants represent 54.2% of adjusted rate of return.
The transaction allows for the issuance of additional notes, which may rank senior, pari passu with, or subordinate to the 2016-1 notes. These additional notes may be issued without the benefit of additional collateral, provided the debt service coverage ratio, post-issuance, is not less than 2.0x.
The possibility of future ratings upgrades may be limited due to this provision.