American Tower $175 million convertible talked at 2.75-3.25% yield, up 37.5-42.5%

By Ronda Fears

Nashville, July 28 - American Tower Corp. returned to the convertible market with a $175 million deal. The issue was launched late Monday for pricing after Tuesday's close. It is expected to yield 2.75% to 3.25% with a 37.5% to 42.5% initial conversion premium.

Goldman Sachs & Co. is sole bookrunner of the Rule 144A deal.

The seven-year senior notes will be non-callable for five years.

Holders will have dividend protection through a conversion ratio adjustment.

There is a $35 million greenshoe available.

The company said proceeds will be used for debt retirement, half to pay down bank debt and half to buy back debt securities.

American Tower has been buying back its 2.25% discount converts due 2009, which are putable on Oct. 22, for some time.

Last week, the company said that during the six months ending June 30 it had exchanged about $93.5 million of principal, or $73.9 million of accreted value of that issue for around 8.4 million shares of Class A common stock and $24.8 million in cash.

At June 30, American Tower said the accreted value of the remaining 2.25s was $140.1 million, and it had $192.9 million of restricted cash and investments that could be used to retire those notes or its other senior and convertible notes.

American Tower also has a 6.25% convertible due 2009, with $213 million outstanding at June 30, and a 5% convertible due 2010, with $450 million outstanding at June 30.

Also, Monday, the satellite tower owner and operator said it plans to sell 12.4 million shares of Class A common stock for an estimated $114.4 million in proceeds, with proceeds earmarked for debt repurchases or to make equity contributions to borrower subsidiaries under its credit facilities, which will be able to use proceeds for general corporate purposes.

Goldman is bookrunner for the stock offering as well.

American Tower shares closed Monday up 20c, or 2.07%, to $9.85.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.