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American Tower to Raise $1.6B With Senior Notes Offering
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American Tower Corporation (AMT - Free Report) priced a public offering of two different issues of unsecured senior notes. Specifically, the 2028 notes, with an aggregate principal amount of 750 million euros ($893.4 million), carry an interest rate of 0.5% per annum and have been priced at 99.555% of the face value.
Another offering of 2032 senior notes, with an aggregate principal amount of 650 million euros ($744.3 million), has been priced at 99.575%. These securities carry an interest rate of 1% per annum.
Net proceeds from the offering are estimated to be 1,385.2 million euros ($1,650 million) after deducting estimated offering expenses and underwriting discounts.
American Tower intends to allocate net proceeds from the offering to reduce the outstanding balance under its $3.1-billion senior unsecured multicurrency revolving credit facility, which was amended and restated in December 2019. Additionally, the company will use proceeds to repay balance under its $1.19-billion senior unsecured term loan that it entered in April 2020 and for general corporate needs.
The company’s efforts to tap the debt market amid a low interest-rate environment and in such testing times are a strategic fit. Furthermore, since unsecured notes can be borrowed at lower rates, the new debt will result in lower funding costs.
Markedly, as of the second-quarter end, American Tower enjoyed investment-grade credit rating of BBB-, BBB+ and Baa3 as well as a stable outlook from Standard & Poor’s, Fitch and Moody’s, respectively. This enables the company to access the debt market at favorable terms.
Further, at the end of the second quarter, the company had $6.5 billion of total liquidity. This comprised $2 billion in cash and cash equivalents, and availability of $4.5 billion under its numerous revolving credit facilities (net of any outstanding letters of credit). This supports its debt servicing ability.
However, customer concentration is high for American Tower, with AT&T, Verizon Wireless and T-Mobile being its top three customers, accounting for 51% of its total property segment revenues as of second-quarter 2020. The loss of any of these customers, consolidation among them or reduction in network spending leads to a material impact on the company’s top line.
Shares of this Zacks Rank #3 (Hold) company have gained 7.9% over the past year against the industry’s 9.1% decline.
Stocks to Consider
Duke Realty Corporation’s Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been revised 3.5% upward to $1.49 over the past month. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sabra Healthcare REIT, Inc.’s (SBRA - Free Report) FFO per share estimates for the ongoing year have been revised 4.3% upward to $1.71 over the past month. The company currently carries a Zacks Rank of 2.
Physicians Realty Trust’s (DOC - Free Report) FFO per share estimates for 2020 have been marginally revised upward to $1.06 over the past week. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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American Tower to Raise $1.6B With Senior Notes Offering
American Tower Corporation (AMT - Free Report) priced a public offering of two different issues of unsecured senior notes. Specifically, the 2028 notes, with an aggregate principal amount of 750 million euros ($893.4 million), carry an interest rate of 0.5% per annum and have been priced at 99.555% of the face value.
Another offering of 2032 senior notes, with an aggregate principal amount of 650 million euros ($744.3 million), has been priced at 99.575%. These securities carry an interest rate of 1% per annum.
Net proceeds from the offering are estimated to be 1,385.2 million euros ($1,650 million) after deducting estimated offering expenses and underwriting discounts.
American Tower intends to allocate net proceeds from the offering to reduce the outstanding balance under its $3.1-billion senior unsecured multicurrency revolving credit facility, which was amended and restated in December 2019. Additionally, the company will use proceeds to repay balance under its $1.19-billion senior unsecured term loan that it entered in April 2020 and for general corporate needs.
The company’s efforts to tap the debt market amid a low interest-rate environment and in such testing times are a strategic fit. Furthermore, since unsecured notes can be borrowed at lower rates, the new debt will result in lower funding costs.
Markedly, as of the second-quarter end, American Tower enjoyed investment-grade credit rating of BBB-, BBB+ and Baa3 as well as a stable outlook from Standard & Poor’s, Fitch and Moody’s, respectively. This enables the company to access the debt market at favorable terms.
Further, at the end of the second quarter, the company had $6.5 billion of total liquidity. This comprised $2 billion in cash and cash equivalents, and availability of $4.5 billion under its numerous revolving credit facilities (net of any outstanding letters of credit). This supports its debt servicing ability.
However, customer concentration is high for American Tower, with AT&T, Verizon Wireless and T-Mobile being its top three customers, accounting for 51% of its total property segment revenues as of second-quarter 2020. The loss of any of these customers, consolidation among them or reduction in network spending leads to a material impact on the company’s top line.
Shares of this Zacks Rank #3 (Hold) company have gained 7.9% over the past year against the industry’s 9.1% decline.
Stocks to Consider
Duke Realty Corporation’s Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been revised 3.5% upward to $1.49 over the past month. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sabra Healthcare REIT, Inc.’s (SBRA - Free Report) FFO per share estimates for the ongoing year have been revised 4.3% upward to $1.71 over the past month. The company currently carries a Zacks Rank of 2.
Physicians Realty Trust’s (DOC - Free Report) FFO per share estimates for 2020 have been marginally revised upward to $1.06 over the past week. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>