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Sba Communications 8-K Report, Material Agreement (Jan 25, 2024)

Reports
Material Agreements·Financial Events·Exhibits & Filings
Filing Date
Filed January 25, 2024
Period End
January 25, 2024
Security
SBAC
In the record · 2016–202610-K1110-Q328-K107

SBAC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’20May ’20
  2. Leadership change8-K · Jun ’22Jun ’22
  3. Material agreement8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed January 25, 2024. Cited figures are marked; the original filing is the authoritative source.

On January 25, 2024, SBA Senior Finance II LLC, a wholly-owned subsidiary of SBA Communications Corporation (SBAC), entered into a Third Amended and Restated Credit Agreement with SBAC and related subsidiaries as guarantors, a syndicate of lenders, and Toronto Dominion (Texas) LLC as administrative agent.

The agreement increased the revolving credit commitments from $1.5 billion to $1.75 billiona and extended the revolver's maturity from July 7, 2026 to January 25, 2029. It also added provisions for Term SOFR as a benchmark rate and mechanics for a future benchmark transition. The agreement provides a new seven-year senior secured term loan of $2.3 billion, issued at 99.75% of par and maturing January 25, 2031.

The company expects to use the proceeds to refinance the 2018 Term Loan and pay related fees and expenses. The term loan bears interest at the Base Rate plus 1.0%b or Term SOFR plus 2.0%, with quarterly principal repayments of 0.25% of the initial principal beginning June 30, 2024. Prepayments are generally penalty-free, except for a 1.0% prepayment fee on certain refinancing or repricing transactions within six months of the effective date.

Revolver borrowings bear interest at Term SOFR or the Eurodollar Rate plus a margin of 1.125%c to 1.500%, or the Base Rate plus 0.125% to 0.500%, based on the leverage ratio. The sustainability-linked adjustments from the 2021 Refinancing Amendment are retained, allowing rate adjustments of up to 0.05% tied to tower lighting and renewable energy credit targets. The borrowings are guaranteed by SBAC and certain subsidiaries and secured by a first lien on the membership interests of SBA Telecommunications, LLC, SBA Senior Finance, LLC and SBA Senior Finance II, and on substantially all of the assets of SBA Senior Finance II and the subsidiary guarantors, excluding real property leasehold, easement and fee interests.

02—Key points

Key Highlights

  1. Revolving credit commitments increased from $1.5 billion to $1.75 billion, with maturity extended from July 7, 2026 to January 25, 2029.
  2. A new seven-year senior secured term loan of $2.3 billion was issued at 99.75% of par and matures January 25, 2031.
  3. Term loan proceeds are expected to refinance the 2018 Term Loan and pay related fees and expenses.
  4. Term loan pricing is Base Rate plus 1.0% or Term SOFR plus 2.0%, with quarterly amortization of 0.25% of initial principal starting June 30, 2024.
  5. Revolver pricing ranges from 1.125% to 1.500% over Term SOFR or Eurodollar Rate, or 0.125% to 0.500% over the Base Rate, based on leverage ratio.
  6. A 1.0% prepayment fee applies to certain refinancing or repricing prepayments made within six months of the agreement's effective date.
  7. Debt is guaranteed by SBAC and subsidiaries and secured by a first lien on key membership interests and substantially all assets, excluding real property interests.

03—Questions

Frequently Asked Questions

  1. How much capacity does SBAC's revolving credit facility now have?

    The revolving credit commitments were increased from $1.5 billion to $1.75 billion aggregate principal amount, which may be borrowed, repaid and redrawn, subject to specified financial ratios and other customary borrowing conditions.

  2. What new debt did the company take on under this agreement?

    The agreement provides a new seven-year senior secured term loan in an aggregate principal amount of $2.3 billion, issued at 99.75% of par and maturing January 25, 2031. The filing states the company expects to use the proceeds to refinance the 2018 Term Loan and pay related fees and expenses.

  3. How is the new term loan priced and repaid?

    The term loan bears interest at the Base Rate plus 1.0% per annum or Term SOFR plus 2.0% per annum, at the borrower's election. Principal is repaid quarterly, on the last day of March, June, September and December, starting June 30, 2024, at 0.25% of the initial aggregate principal amount.

  4. Are there penalties for repaying the term loan early?</br>

    The term loan can be prepaid in whole or in part without a prepayment penalty, except for prepayments funded from certain refinancing or repricing transactions within six months of the agreement's effective date, which carry a prepayment fee of 1.0% of the amount prepaid.

  5. What assets secure this borrowing?

    Amounts borrowed and certain hedging transactions are secured by a first lien on the membership interests of SBA Telecommunications, LLC, SBA Senior Finance, LLC and SBA Senior Finance II, and on substantially all assets of SBA Senior Finance II and the subsidiary guarantors, other than leasehold, easement and fee interests in real property. SBAC and certain subsidiaries also guarantee the borrowings.

04—Continue

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