Moody’s changes Crown Castle to negative

Moody's Investors Service said it affirmed Crown Castle International Corp.'s ratings, including the Baa3 senior unsecured rating, and revised the outlook to negative from stable.

The rating action follows Crown Castle's announcement that it agreed to acquire privately held LTS Group Holdings LLC (Lightower, B2, stable) for $7.1 billion in cash. Lightower owns or has rights to roughly 32,000 route miles of fiber assets located primarily in metro markets in the Northeast, including Boston, New York and Philadelphia.

The acquisition is expected to close by the end of 2017.

Moody’s said the outlook change negative reflects leverage that is higher than original expectations and that the high capital investment required to grow the Lightower business will temper the pace of the REIT's deleveraging in the next 12 to 18 months.

In addition to higher leverage over a longer period of time, the negative outlook reflects Moody's view that the large Lightower acquisition will have high integration risk, the agency said.

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