Summary
American Tower Corporation (AMT) announced on April 3, 2020, the execution of a new $1.14 billion unsecured Term Loan Agreement. This facility matures on April 2, 2021, and does not require principal amortization, offering flexibility with the option for early repayment without penalty. The primary use of these proceeds is to reduce outstanding debt under its existing revolving credit facility and for general corporate and working capital needs.
Key Highlights
- 1Secured a new $1.14 billion unsecured term loan facility.
- 2The term loan matures on April 2, 2021.
- 3No principal amortization is required; the full amount is due at maturity.
- 4Borrowers have the option to prepay the loan in whole or in part at any time without penalty.
- 5Proceeds will be used to repay existing revolving credit facility debt and for general corporate purposes.
- 6The loan carries interest rates of 1.75% above LIBOR or 0.75% above a defined base rate.
- 7The agreement includes financial covenants related to the Company's total leverage ratio (not greater than 6.00:1.00) and senior secured leverage ratio (not greater than 3.00:1.00).
Frequently Asked Questions
The primary purposes of the new term loan are to repay existing indebtedness under American Tower's senior unsecured revolving credit facility and to fund working capital and general corporate purposes.
The term loan is unsecured, has a principal amount of $1.14 billion, matures on April 2, 2021, and does not require principal amortization. Interest rates are competitive, based on either LIBOR or a defined base rate, plus a spread. The company can prepay the loan without penalty.
Yes, the Term Loan Agreement includes financial covenants. The Company must maintain a total leverage ratio (Total Debt to Adjusted EBITDA) not greater than 6.00 to 1.00, and a senior secured leverage ratio (Senior Secured Debt to Adjusted EBITDA) not greater than 3.00 to 1.00. Failure to comply could result in a default.
This new term loan is intended to refinance a portion of the Company's existing revolving credit facility debt. This suggests a strategic move to manage its debt profile and potentially extend maturity for some obligations, while also ensuring liquidity for ongoing operations.