8-KMaterial AgreementsFinancial EventsExhibits & Filings

CROWN CASTLE INC. 8-K Report, Material Agreement (Aug 4, 2009)

Filed August 4, 2009For Securities:CCI

Summary

Crown Castle International Corp. (CCI) reported the issuance of $250 million in Senior Secured Notes, Series 2009-1, through its indirect wholly-owned subsidiaries. These notes are structured into two classes: Class A-1 with a principal balance of $175 million at a 6.25% rate, and Class A-2 with a principal balance of $75 million at a 9.00% rate. The notes are secured by the cash flows generated from 1,167 tower sites held by the issuing special purpose entities and are guaranteed by Global Signal Holdings III LLC, the direct parent of the primary issuer. This transaction aims to refinance existing debt related to Commercial Mortgage Pass-Through Certificates, Series 2004-2, impacting the company's capital structure and debt servicing obligations. The issuance utilizes special purpose entities (Issuers) that are restricted from owning assets other than tower sites and related assets, and from incurring additional debt beyond what is permitted by the Indenture. The notes' repayment is solely tied to the operational cash flows of these tower sites. The structure includes provisions for cash traps and early amortization events triggered by a Debt Service Coverage Ratio (DSCR) falling below certain thresholds (1.30 for cash traps, 1.15 for early amortization), indicating potential risks and protective mechanisms for noteholders. Crown Castle USA Inc., a subsidiary of CCI, will manage the assets and cash flow under separate management and cash management agreements.

Key Highlights

  • 1Crown Castle International Corp. (CCI) announced the issuance of $250 million in Senior Secured Notes, Series 2009-1, via its indirect subsidiaries.
  • 2The notes are divided into two tranches: $175 million Class A-1 at 6.25% interest and $75 million Class A-2 at 9.00% interest.
  • 3The debt is secured by the cash flows from 1,167 tower sites owned by the issuing special purpose entities.
  • 4The issuance serves to refinance existing debt related to Global Signal Trust II's 2004-2 Certificates.
  • 5The issuing entities are special purpose vehicles with restrictions on asset ownership and debt incurrence.
  • 6The notes feature protective covenants, including cash trap mechanisms and early amortization events, tied to a Debt Service Coverage Ratio (DSCR) of the underlying tower site assets.
  • 7Crown Castle USA Inc. will act as the manager for the assets and cash flow operations under a management agreement.

Frequently Asked Questions

This Form 8-K filing reports the entry into a material definitive agreement regarding the issuance of $250 million in Senior Secured Notes, Series 2009-1, by Crown Castle International Corp.'s indirect wholly-owned subsidiaries.

The Senior Secured Notes are secured by a first priority security interest in all assignable personal property of the issuing entities, the space licenses for the tower sites, and the revenues generated from these licenses. The equity interests in the issuing entities are also pledged as collateral.

The repayment of these notes is solely dependent on the cash flows generated by the tower sites. The notes include provisions for cash traps and early amortization events if the Debt Service Coverage Ratio (DSCR) falls below certain thresholds (1.30 for cash traps, 1.15 for early amortization), indicating a sensitivity to operational performance and market conditions affecting site lease revenues.

The net proceeds from the offering, along with other cash, were used by the issuing subsidiaries to fully repay outstanding mortgage loans related to the Commercial Mortgage Pass-Through Certificates, Series 2004-2.