Item 1.01 Conclusion of a Material Definitive Agreement.
Show of Tower Securities
At October 27, 2021, pursuant to the terms of a purchase contract (the “Purchase Agreement”) between SBA Senior Finance, LLC, indirect subsidiary of
SBA communications company (the company “), Deutsche Bank Trust Company Americas, as a trustee (the “Trustee”), and Barclays Capital Inc., Citigroup World Markets Inc. and JP Morgan Securities USA LLC, as representatives of several initial purchasers named in Annex I (the “initial purchasers”), SBA Tower Trust (the “Trust”), a new York common law trust established by Filer SBA LLC, an indirect subsidiary of the Company (“SBA Filer”), issued, and the Initial Purchasers purchased, $ 1.79 billion
total principal amount of Tower guaranteed income securities, made up of
$ 895.0 million global capital of the series 2021-2C (the “2021-2C Tower Securities“) and $ 895.0 million global capital of the series 2021-3C (the “2021-3C Tower Securities“). On 2021-2C Tower Securities have an early repayment date in April 2027, a final due date in October 2051
and an interest rate of 1.840% per annum. The 2021-3C Tower Securities have an early repayment date in October 2031, a final due date in October 2056 and an interest rate of 2.593% per annum.
To meet the applicable risk retention requirements of the RR Regulation promulgated under the Securities Exchange Act of 1934, as amended (the “Risk Retention Rules”), SBA Garant LLC, a subsidiary of SBA Depositor, also purchased $ 94.3 million principal amount of Tower guaranteed income securities, Series 2021-3R (the “2021-3R Tower Securities“and, with the 2021-2C
Tower Securities and the 2021-3C Tower Securities, the “Second 2021 Tower Securities“) in order to maintain an” eligible horizontal residual interest “(as defined in the Risk Retention Rules) of an amount equal to at least 5% of the fair value of the securities offered and held. Tower Securities
have an early repayment date in October 2031, a final due date in
October 2056 and an interest rate of 4.090% per annum.
The net proceeds of the offering were approximately $ 1.776 billion, net of discounts and initial purchase costs. The net proceeds of the offering have been used to repay the amounts outstanding under the Company’s revolving credit facility and the remaining net proceeds will be used to redeem all of the proceeds.
$ 1.1 billion total principal amount of the Company’s 4.875% senior notes due 2024 (the “2024 Notes”) on November 8, 2021.
Ninth supplement to the loan and guarantee contract
As part of the issuance of the Second 2021 Tower Securities, SBA Properties, LLC, SBA, LLC Sites, 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 serving agent on behalf of the trustee, entered into a ninth supplement to the loan and guarantee agreement, dated October 27, 2021 (the “Ninth Loan Supplement”), which supplemented and amended the Second Amended and Restated Loan and Guarantee Agreement, dated October 15, 2014.
Pursuant to the Ninth Loan Supplement, among others, (1) the outstanding principal amount of the mortgage loan (the “Mortgage Loan”) has been increased by
$ 1.79 billion (or by a net of $ 1.2 billion after giving effect to the prepayment of the $ 575.0 million total principal amount of Tower guaranteed income securities, Series 2013-2C (the “2013-2C Tower Securities“)) and (2) the Borrowers have become jointly and severally liable for all $ 7.05 billion
borrowed under the Mortgage Credit corresponding to 2014-2C Tower Securities, 2018-1C Tower Securities, 2018-1R Tower Securities, 2019-1C Tower Securities, 2019-1R Tower Securities, 2020-1C Tower Securities, 2020-2C Tower Securities and 2020-2R Tower Securities and the new Second 2021 Tower Securities
(together the “Tower Securities“).
The mortgage loan is the Trust’s sole asset. The total principal amount of the loan components outstanding under the mortgage loan is $ 7.05 billion, composed of (1) the $ 620 million ready component under the same conditions as the 2014-2C Tower Securities, (2) the $ 640 million loan component on the same terms as the 2018-1C Tower Securities, (3) the
$ 33.7 million loan component with the same conditions
and conditions as 2018-1R Tower Securities, (4) the $ 1.165 billion loan component on the same terms as the 2019-1C Tower Securities, (5) the $ 61.4 million Loan component with the same terms and conditions as the 2019-1R Tower Securities, (6) the $ 750 million loan component on the same terms as the 2020-1C Tower Securities, (7) on $ 600 million loan component on the same terms as the 2020-2C Tower Securities, (8) on $ 71.1 million loan component on the same terms as the 2020-2R Tower Securities, (9) on $ 1.165 billion loan component on the same terms as the 2021-1C Tower Securities, (10) on $ 61.4 million
loan component on the same terms as the 2021-1R Tower Securities, (11) on $ 895 million loan component under the same conditions as the 2021-2C Notes, (12) on $ 895 million loan component under the same conditions as Securities 2021-3C and (13) on
$ 94.3 million loan component on the same terms as the 2021-3R
The underlying mortgage loan Tower Securities must be repaid from the cash flows associated with the operation of the approximately 9,900 aggregated tower sites owned by the Borrowers at the balance sheet date. The mortgage loan is secured by (1) mortgages, trust deeds and deeds securing the debt on a substantial portion of the tower sites, (2) a security interest in the towers and substantially all personal property and accessories borrowers, (3) Borrowers’ rights under rental leases, and (4) all 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 income for the preceding calendar month.
Borrowers can prepay $ 1.79 billion loan corresponding to the second 2021
Tower Securities without early repayment consideration (1) within twelve months of the early repayment date in the case of $ 895.0 million loan corresponding to 2021-2C Tower Securities, (2) within eighteen months of the early repayment date in the case of $ 895.0 million loan corresponding to 2021-3C Tower Securities, (3) with proceeds received as a result of a conviction or accident of any tower belonging to the Borrowers or (4) during an amortization period. In all other circumstances, Borrowers may prepay
$ 1.79 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 (a) the present value associated with the portion of the principal balance of the $ 1.79 billion loan being prepaid, calculated in accordance with the formula set out in the Ninth Loan Supplement, on the prepayment date of all future installments of principal and interest due from the prepayment date until and including the first due date within (i) twelve months of the early redemption date of 2021-2C Tower Securities and (ii) eighteen months from the early redemption date of 2021-3C Tower Securities, on (b) the part of the principal balance paid in advance on the date of this early repayment.
Insofar as the loans corresponding to the Second 2021 Tower Securities
are not fully repaid on the applicable scheduled repayment date, the applicable interest rate will increase by the greater of (i) 5% and (ii) the amount, if any, by the sum of (x) the period of ten years we the Treasury rate plus (y) the credit spread for that component (as set out in the Ninth Loan Supplement) plus (z) 5%, exceeds this interest rate. Except as otherwise provided herein, all other material terms and conditions of the Mortgage remain unchanged.
The Company and certain of its affiliates have already entered into commercial financial agreements with each of the original purchasers and / or their respective affiliates, and each of these entities and / or its affiliates has in the past provided financial services, 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 various term loans and revolving credit facilities under the senior credit agreement, (2) as bookrunner and / or first acquirer of our various series of Tower guaranteed income securities and (3) as bookrunner and / or initial purchaser of our various series of Senior Notes. In addition, some of the original purchasers or their affiliates may from time to time own a portion of the 2013-2C Tower Securities and / or the 2024 Senior Notes and, therefore, may or may have received a portion of the net proceeds of the Offering.
Item 2.03 Creation of a direct financial obligation or an obligation under
an off-balance sheet arrangement of a registrant.
The information set out in section 1.01 is incorporated by reference herein.
Item 9.01 Financial statements and supporting documents.
10.12H Ninth Loan and Security Agreement Supplement, dated as of October 27,
2021, 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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