Item 1.01 Entry into a Material Definitive Agreement.
Issuance of 2020 Tower Securities
On July 14, 2020, pursuant to the terms of a Purchase Agreement (the "Purchase
Agreement") among SBA Senior Finance, LLC, an indirect subsidiary of SBA
Communications Corporation (the "Company"), Deutsche Bank Trust Company
Americas, as trustee (the "Trustee"), and Barclays Capital Inc., Deutsche Bank
Securities Inc. and J.P. Morgan Securities LLC, as representatives of the
several initial purchasers named on Schedule I thereto (the "Initial
Purchasers"), SBA Tower Trust (the "Trust"), a New York common law trust
established by SBA Depositor LLC, an indirect subsidiary of the Company ("SBA
Depositor"), issued, and the Initial Purchasers purchased, $1.35 billion
aggregate principal amount of Secured Tower Revenue Securities, consisting of
$750 million principal amount of Secured Tower Revenue Securities, Series
2020-1C (the "2020-1C Tower Securities") and $600 million of Secured Tower
Revenue Securities, Series 2020-2C (the "2020-2C Tower Securities", and together
with the 2020-1C Tower Securities, the "2020 Tower Securities").
The 2020-1C Tower Securities have an anticipated repayment date in January 2026,
a final maturity date in July 2050 and an interest rate of 1.884% per annum. The
2020-2C Tower Securities have an anticipated repayment date in January 2028, a
final maturity date in July 2052 and an interest rate of 2.328% per annum.
The net proceeds from the offering were approximately $1.34 billion, after
deducting initial purchasers' discounts and expenses. Net proceeds from the
offering were used to (1) repay $500 million principal amount, of the Secured
Tower Revenue Securities, Series 2015-1C (the "2015-1C Tower Securities"), (2)
repay $700 million principal amount of the Secured Tower Revenue Securities,
Series 2016-1C (the "2016-1C Tower Securities"), and (3) make a cash
distribution to SBA Guarantor LLC, an affiliate of SBA Depositor ("SBA
Guarantor"), which will further distribute such amount to one or more other
Company entities to be used for general corporate purposes.
To satisfy the applicable risk retention requirements of Regulation RR
promulgated under the Securities Exchange Act of 1934, as amended (the "Risk
Retention Rules"), the Trust issued, and SBA Guarantor purchased, $71.1 million
principal amount of Secured Tower Revenue Securities, Series 2020-2R (the
"2020-2R Tower Securities") in order to retain an "eligible horizontal residual
interest" (as defined in the Risk Retention Rules) in an amount equal to at
least 5% of the fair value of the offered and retained securities. The 2020-2R
Tower Securities have an anticipated repayment date in January 2028, a final
maturity date in July 2052 and an interest rate of 4.336% per annum.
Sixth Loan and Security Agreement Supplement
In connection with the issuance of the 2020 Tower Securities, SBA Properties,
LLC, SBA Sites, LLC, SBA Structures, LLC, SBA Infrastructure, LLC, SBA Monarch
Towers III, LLC, SBA 2012 TC Assets PR, LLC, SBA 2012 TC Assets, LLC, SBA Towers
IV, LLC, SBA Monarch Towers I, LLC, SBA Towers USVI, Inc., SBA GC Towers, LLC,
SBA Towers VII, LLC, SBA Towers V, LLC, and SBA Towers VI, LLC (the "Borrowers")
and Midland Loan Services, a Division of PNC Bank, National Association, as
servicer on behalf of the Trustee, entered into a Sixth Loan and Security
Agreement Supplement, dated July 14, 2020 (the "Sixth Loan Supplement"), which
supplemented and amended the Second Amended and Restated Loan and Security
Agreement, dated October 15, 2014.
Pursuant to the Sixth Loan Supplement, among other things, (1) the outstanding
principal amount of the mortgage loan (the "Mortgage Loan") was increased by
$1.42 billion (or by a net of $221.1 million after giving effect to the
prepayment of the 2015-1C Tower Securities and the 2016-1C Tower Securities) and
(2) the Borrowers became jointly and severally liable for the aggregate
$5.3 billion borrowed under the Mortgage Loan corresponding to the 2013-2C Tower
Securities, 2014-2C Tower Securities, 2017-1C Tower Securities, 2017-1R Tower
Securities, 2018-1C Tower Securities, 2018-1R Tower Securities, 2019-1C Tower
Securities, 2019-1R Tower Securities and the newly issued 2020-1C Tower
Securities, 2020-2C Tower Securities and 2020-2R Tower Securities (together the
"Tower Securities").
The Mortgage Loan is the sole asset of the Trust. The aggregate principal amount
of the loan components outstanding under the Mortgage Loan is $5.3 billion,
comprised of (1) the $575 million loan component with the
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same terms and conditions as the 2013-2C Tower Securities, (2) the $620 million
loan component with the same terms and conditions as the 2014-2C Tower
Securities, (3) the $760 million loan component with the same terms and
conditions as the 2017-1C Tower Securities, (4) the $40 million loan component
with the same terms and conditions as the 2017-1R Tower Securities, (5) the
$640 million loan component with the same terms and conditions as the 2018-1C
Tower Securities, (6) the $33.7 million loan component with the same terms and
conditions as the 2018-1R Tower Securities, (7) the $1.165 billion loan
component with the same terms and conditions as the 2019-1C Tower Securities,
(8) the $61.4 million loan component with same terms and conditions as the
2019-1R Tower Securities, (9) the $750 million loan component with the same
terms and conditions as the 2020-1C Tower Securities, (10) the $600 million loan
component with the same terms and conditions as the 2020-2C Tower Securities and
(11) the $71.1 million loan component with the same terms and conditions as the
2020-2R Tower Securities.
The Mortgage Loan underlying the Tower Securities is to be repaid from the
operating cash flows from the aggregate 10,000 tower sites owned by the
Borrowers, as of the closing date. The Mortgage Loan is secured by
(1) mortgages, deeds of trust and deeds to secure debt on a substantial portion
of the tower sites, (2) a security interest in the towers and substantially all
of the Borrowers' personal property and fixtures, (3) the Borrowers' rights
under tenant leases, and (4) all of the proceeds of the foregoing. For each
calendar month, SBA Network Management, Inc., an indirect subsidiary of the
Company, is entitled to receive a management fee for its services as manager
equal to 4.5% of the Borrowers' operating revenues for the immediately preceding
calendar month.
The Borrowers may prepay the $1.35 billion loan corresponding to the 2020 Tower
Securities with no prepayment consideration (1) within twelve months of the
anticipated repayment date in the case of the $750 million loan corresponding to
the 2020-1C Tower Securities and within eighteen months of the anticipated
repayment date in the case of the $600 million loan corresponding to the 2020-2C
Tower Securities, (2) with proceeds received as a result of any condemnation or
casualty of any tower owned by the Borrowers or (3) during an amortization
period. In all other circumstances, the Borrowers may prepay the $1.35 billion
loan, in whole or in part, upon payment of the applicable prepayment
consideration. The prepayment consideration consists of an amount equal to the
excess, if any, of (i) the present value associated with the portion of the
principal balance of the $1.35 billion loan being prepaid, calculated in
accordance with the formula set forth in the Sixth Loan Supplement, on the date
of prepayment of all future installments of principal and interest required to
be paid from the date of prepayment to and including the first due date within
(a) twelve months of the anticipated repayment date of the 2020-1C Tower
Securities and (b) eighteen months of the anticipated repayment date of the
2020-2C Tower Securities, as applicable, over (ii) that portion of the principal
balance prepaid on the date of such prepayment.
To the extent that the loans corresponding to the 2020 Tower Securities are not
fully repaid by the applicable anticipated repayment date, the applicable
interest rate will increase by the greater of (i) 5% and (ii) the amount, if
any, by which the sum of (x) the ten-year U.S. treasury rate plus (y) the
credit-based spread for such component (as set forth in the Sixth Loan
Supplement) plus (z) 5%, exceeds such interest rate. Except as set forth herein,
all other material terms and conditions of the Mortgage Loan remain unchanged.
Relationships
The Company and certain of its affiliates have previously entered into
commercial financial arrangements with each of the Initial Purchasers, and/or
their respective affiliates, and each of these entities and/or its affiliates
has in the past provided financial, advisory, investment banking and other
services to the Company and its affiliates, including serving (1) as a lender
and/or in other related capacities in connection with the Senior Credit
Agreement and the various term loans and revolving credit facility under the
Senior Credit Agreement, (2) as a book runner and/or as an initial purchaser for
our various series of Secured Tower Revenue Securities and (3) as a book runner
and/or an initial purchaser for our various series of Senior Notes. Certain of
the Initial Purchasers or their affiliates may hold from time to time a portion
of the 2015-1C Tower Securities and/or the 2016-1C Tower Securities and,
accordingly, may receive a portion of the net proceeds of the offering.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.12F Sixth Loan and Security Agreement Supplement, dated as of July 14,
2020, by and among the Borrowers named therein and Midland Loan
Services, a division of PNC Bank, National Association, as Servicer on
behalf of Deutsche Bank Trust Company Americas, as Trustee.
104 Cover Page Interactive File (the cover page tags are embedded within
the Inline XBRL document).
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