8-KMaterial AgreementsFinancial EventsExhibits & Filings

AMERICAN TOWER CORP /MA/ 8-K Report, Material Agreement (Mar 24, 2008)

Filed March 24, 2008For Securities:AMT

Summary

American Tower Corporation (AMT) announced on March 24, 2008, a material definitive agreement to enter into an incremental facility commitment for an additional $325.0 million under its existing senior unsecured revolving credit facility. The primary purpose of this new funding is to repay $325.0 million of existing indebtedness currently drawn on the revolving credit facility, effectively refinancing a portion of its debt. The company anticipates receiving net proceeds of approximately $321.7 million from this transaction. The new incremental facility will mature on June 8, 2012, and the interest rate will be set at LIBOR + 1.00% based on current debt ratings. The company also plans to utilize interest rate swaps to hedge against floating rate risk for a portion of this facility. This move, while increasing the drawn amount on the revolver to $650.0 million, is presented as a debt management strategy aimed at optimizing its capital structure.

Key Highlights

  • 1AMT entered into an incremental facility commitment for $325.0 million on March 24, 2008.
  • 2The new facility is part of its existing $1.25 billion senior unsecured revolving credit facility.
  • 3Net proceeds of approximately $321.7 million will be used to repay $325.0 million of existing debt under the revolver.
  • 4Following the repayment, $650.0 million will remain outstanding on the revolving credit facility.
  • 5The incremental facility matures on June 8, 2012.
  • 6The initial interest rate for the incremental facility is set at LIBOR + 1.00%.
  • 7AMT intends to enter into interest rate swap agreements to manage interest rate risk.

Frequently Asked Questions

The primary purpose of the incremental facility is to repay $325.0 million of existing indebtedness that was drawn on American Tower's senior unsecured revolving credit facility. This is a debt refinancing activity.

Based on the company's current debt ratings, the interest rate for the incremental facility is set at LIBOR + 1.00%. The company has the option to choose between LIBOR-based or base rate borrowings, with margins varying based on debt ratings.

This transaction is primarily a refinancing of existing debt within the company's revolving credit facility. While the drawn amount on the revolver will be $650.0 million after the repayment, it does not represent new net debt issuance but rather a restructuring of existing drawn amounts.

Yes, the incremental facility includes financial ratios, operating covenants, and other restrictions applicable to the company and its restricted subsidiaries on a consolidated basis, which are consistent with the existing revolving credit facility. Failure to comply could result in a default.