MTP ABS Funding is preparing to sell $386 million in asset-backed bonds through the TowerPoint Fixed Rate Secured Cellular Site Revenue Notes.
The series 2026-1 notes are atypical of most wireless tower transactions, because the interests backing the notes consists of the land between cell towers and easement interests in rooftops, according to analysts at Fitch Ratings.
Yet there is still the conventional approach of the notes being backed primarily by mortgages, repaid from the annualized run rate revenue (ARRR) on tower sites, according to Fitch analysts.
TowerPoint 2026-1 will issue the notes through four tranches of class A, B and R tranches in a master trust structure, Fitch said. The notes attain credit enhancement through subordination, and subclasses 2026-1 A-V and 2026-1 A-2 will have the same rating, A-, and are ranked pari passu in terms of losses, the rating agency said.
Any additional securities that the transaction issues will rank equally with the class that has the same class designation. They will also be subordinate to any earlier alphabetical classes for receiving interest and principal, regardless of their maturity.
The notes have an anticipated repayment date (ARD) of April 2031, with a rated final payment date of April 2056.
TD Securities is the lead underwriter on the deal, Fitch said.
Some 1,084 leases, primarily delivering telephony services, will support cash flow to the notes, and that line of revenue specifically accounts for 98.8% of (ARRR). AT&T, T-Mobile and Verizon appear to be the three largest providers, accounting for 18.3%, 22.5% and 17.25%, respectively.
Among the deal's credit strengths, a large majority of the portfolio, 88.8%, is associated with investment-grade counterparties, Fitch said. Also, the collateral pool is concentrated with markets, and 77.4% of ARRR related to tower sites located in the top 100 basic trading areas, analysts said.
There are 861 wireless sites in the portfolio, with a per site balance of about $419,279, Fitch said.
On a weighted average (WA) basis, the collateral has a tenant lease term of 26.4 years.
