8-KFinancial Events

CROWN CASTLE INC. 8-K Report, Financial Obligation (Mar 3, 2006)

Filed March 3, 2006For Securities:CCI

Summary

Crown Castle International Corp. (CCI) announced on March 3, 2006, that it entered into three forward-starting interest rate swap agreements on March 1, 2006. These agreements, with a combined notional amount of $1.9 billion, are designed to hedge against potential increases in interest rates related to the upcoming refinancing of $1.9 billion of Tower Revenue Notes by a subsidiary. The refinancing is anticipated to occur by June 15, 2010. The swap agreements involve CCI paying fixed interest rates ranging from approximately 5.179% to 5.182%, with a weighted average of about 5.18%, for a five-year period starting on or before June 15, 2010. In return, CCI will receive floating interest payments based on three-month LIBOR for the same duration. These swaps will be cash-settled on or before June 15, 2010, effectively locking in a fixed rate for a significant portion of the Company's future debt.

Key Highlights

  • 1Entry into three forward-starting interest rate swap agreements totaling $1.9 billion notional amount.
  • 2Purpose of the swaps is to hedge variability in future interest rates.
  • 3The hedging is in anticipation of refinancing $1.9 billion of Tower Revenue Notes.
  • 4Refinancing is expected to occur on or before June 15, 2010.
  • 5Fixed interest rates to be paid by CCI range from 5.179% to 5.182%, averaging approximately 5.18%.
  • 6Swap period is five years, beginning on or before June 15, 2010, through June 15, 2015.
  • 7Agreements involve receiving floating payments based on three-month LIBOR in exchange for fixed payments.
  • 8The swap agreements will be cash-settled on or before June 15, 2010.

Frequently Asked Questions

The primary purpose of these interest rate swap agreements is to hedge against the risk of rising interest rates. Crown Castle International Corp. is anticipating refinancing $1.9 billion of Tower Revenue Notes and wants to secure a predictable interest rate for this future debt.

These are forward-starting swaps. They become effective on or before June 15, 2010, and the fixed interest payments will begin at that time and continue through June 15, 2015. The cash settlement of the swap agreement also occurs on or before June 15, 2010.

The company will be paying fixed interest rates that average approximately 5.18%. Individually, the rates are 5.182%, 5.181%, and 5.179% on the respective notional amounts.

The total notional amount of the interest rate swap agreements is $1.9 billion, which directly corresponds to the amount of Tower Revenue Notes that the company's subsidiary is expected to refinance.