Vertical Bridge Secured Tower Revenue Notes just is issuing the largest-ever batch of asset-backed securities (ABS) from the cell tower sector, raising $1.9 billion.
The deal also included the sector's first single-B rated tranche, on the class M notes, the company announced.
It sold four tranches of series 2026-1 notes—classes C, D, M and R--through a master trust structure, backed by a portfolio of mortgages on 10,425 tower sites across the country, according to a statement from the company and structured finance analysts at Fitch Ratings.
Barclays Capital is the structuring agent and underwriter, on the deal, which is slated to close on February 27, Fitch said. In its statement, Vertical Bridge says the final order book consists of 78 investors, including 41 investors that are new to the Vertical Bridge ABS platform.
The latest series of notes has a rated final payment date of February 2056, according to Fitch, which assigned ratings of A, BBB-, BB- and B to the classes C2, D, F and M, respectively.
Fitch notes several elements that boost credit to the notes, including a large and diverse collateral pool, limited historical churn among a creditworthy customer base and a strong transaction structure, the rating agency said.
In addition to the sites in this issuance, the sponsor contributed 5,688 more wireless communication sites and 5,726 towers and structures to the collateral pool, Fitch said.
Fitch finds that the deal has a net cash flow of $270.4 million, suggesting a haircut to issuer NCF rate of 4.9%, the rating agency said.
In terms of leverage, Vertical 2026-1 has a debt multiple of 14.2x relative to Fitch's NCF on the rated classes, the rating agency said.
The deal also has a leverage trigger to ensure cash flows to the notes. If senior leverage exceeds 9.75x at issuance, then a percentage of excess cash flow will be swept to pay down debt. The sweep percentages begin at 25% of available cash flow and increase to 75% after six months.
