Summary
American Tower Corporation (AMT) announced on April 12, 2011, that it has entered into a new unsecured revolving credit facility, initially providing access to $860 million, with the potential to expand up to $1.0 billion upon receiving additional commitments. This facility, with a five-year term maturing in April 2016, offers flexible borrowing terms and can be used for various corporate purposes including working capital, acquisitions, and debt refinancing. Key to investors, the credit agreement includes financial covenants such as a maximum consolidated total leverage ratio of 6.00:1.00, a maximum consolidated senior secured leverage ratio of 3.00:1.00, and a minimum interest coverage ratio of 2.50:1.00. While these covenants introduce restrictions, they are standard for such credit facilities and aim to ensure the company's financial health. The report also disclosed information regarding a potential special earnings and profits distribution, estimated to be no more than $400 million, in connection with the company's consideration of electing Real Estate Investment Trust (REIT) status for the 2012 tax year.
Key Highlights
- 1Entered into a new unsecured revolving credit facility with an initial capacity of $860 million, expandable to $1.0 billion.
- 2The credit facility has a five-year term, maturing on April 8, 2016.
- 3Interest rates on borrowings are variable, based on LIBOR or a defined base rate, plus a margin that depends on the company's debt ratings.
- 4Contains financial maintenance covenants including consolidated total leverage, consolidated senior secured leverage, and interest coverage ratios.
- 5Borrowings can be used for working capital, acquisitions, general corporate purposes, and refinancing debt.
- 6Potential for a special earnings and profits distribution of up to $400 million if the company elects REIT status for the 2012 tax year.