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.