8-KMaterial AgreementsShareholder MattersCorporate Changes+1

AMERICAN TOWER CORP /MA/ 8-K Report, Material Agreement (May 12, 2014)

Filed May 12, 2014For Securities:AMT

Summary

This 8-K filing from American Tower Corporation (AMT) reports on the company's entry into a material definitive agreement regarding the issuance and sale of 5.25% Mandatory Convertible Preferred Stock, Series A. The company agreed to sell 6,000,000 shares of this preferred stock, with an option exercised for an additional 750,000 shares, in a registered public offering. This offering was conducted under an automatic shelf registration statement. The filing also details the establishment of the preferences, limitations, and relative rights of this Mandatory Convertible Preferred Stock through a Certificate of Designations filed with the Secretary of State of Delaware. This includes provisions regarding dividends on common stock and the liquidation preference for the preferred stockholders, which ranks senior to common stock but subordinate to other senior stock and creditors.

Key Highlights

  • 1AMT entered into an underwriting agreement on May 6, 2014, to issue and sell 6.75 million shares (including exercised option) of 5.25% Mandatory Convertible Preferred Stock, Series A.
  • 2The offering was conducted as a registered public offering utilizing an automatic shelf registration statement.
  • 3A Certificate of Designations was filed on May 12, 2014, to define the rights and preferences of the new preferred stock.
  • 4The Mandatory Convertible Preferred Stock has a liquidation preference of $100.00 per share.
  • 5Dividends on AMT's common stock are restricted unless all accumulated and unpaid dividends on the Mandatory Convertible Preferred Stock are declared and paid or set aside.
  • 6The preferred stock ranks senior to common stock but junior to creditors and any senior stock in liquidation scenarios.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report that American Tower Corporation entered into an underwriting agreement to issue and sell a significant amount of its 5.25% Mandatory Convertible Preferred Stock, Series A, and to detail the specific rights and preferences of this new security.

The 5.25% Mandatory Convertible Preferred Stock has a liquidation preference of $100.00 per share. It accrues dividends at a rate of 5.25% per annum. Importantly, the company cannot pay dividends on its common stock or acquire common stock unless all accumulated dividends on this preferred stock are paid or set aside.

The key impact on existing common stockholders is the restriction on dividend payments and stock repurchases by the company. Until all accumulated and unpaid dividends on the mandatory convertible preferred stock are paid or set aside, the company cannot make such distributions or acquisitions on its common stock. Additionally, in the event of liquidation, the preferred stockholders have a senior claim to assets before common stockholders.

The company initially agreed to sell 6,000,000 shares, and the underwriters exercised their option to purchase an additional 750,000 shares, bringing the total issuance to 6,750,000 shares of 5.25% Mandatory Convertible Preferred Stock, Series A.