8-KMaterial AgreementsFinancial EventsOther Events+1

AMERICAN TOWER CORP /MA/ 8-K Report, Material Agreement (Dec 6, 2004)

Filed December 6, 2004For Securities:AMT

Summary

American Tower Corporation (AMT) has announced the successful completion of an institutional private placement of $200.0 million in aggregate principal amount of 7.125% senior notes due 2012. These new notes are fully fungible with previously issued notes of the same series, bringing the total outstanding principal of this series to $500.0 million. The company secured net proceeds of approximately $199.8 million from this offering. The primary purpose of this financing is to proactively manage its debt structure. AMT intends to use substantially all of the net proceeds to repurchase approximately $85.2 million of its higher-coupon 9 3/8% senior notes due 2009 and to redeem an additional $133.0 million of these same notes. This strategic move aims to reduce future interest expenses and refinance higher-cost debt with a lower-interest-rate instrument.

Key Highlights

  • 1Completed a $200 million private placement of 7.125% senior notes due 2012.
  • 2These new notes are fungible with existing 7.125% senior notes due 2012.
  • 3Net proceeds of approximately $199.8 million were raised from the offering.
  • 4Announced intention to use proceeds to repurchase and redeem a portion of 9 3/8% senior notes due 2009.
  • 5Repurchased approximately $85.2 million of the 9 3/8% senior notes.
  • 6Called for redemption of an additional $133.0 million of the 9 3/8% senior notes.
  • 7The redemption is set for January 5, 2005, at par plus a premium and accrued interest.

Frequently Asked Questions

The primary purpose of the $200 million debt offering is to refinance higher-cost debt. American Tower plans to use the proceeds to repurchase and redeem a significant portion of its outstanding 9 3/8% senior notes due 2009, thereby reducing its overall interest expense.

This offering allows American Tower to replace higher-interest debt (9 3/8% notes) with lower-interest debt (7.125% notes). It effectively reduces the principal amount of the more expensive debt and lowers the company's future interest payment obligations.

The company repurchased approximately $85.2 million in principal amount of its 9 3/8% senior notes due 2009. Additionally, it has called for the redemption of another $133.0 million principal amount of these same notes.

The redemption date for the $133.0 million principal amount of 9 3/8% senior notes has been set for January 5, 2005. This will include the principal amount, an applicable premium, and any accrued and unpaid interest up to that date.