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American Tower to Raise $1.09B With Senior Notes Offering
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American Tower Corporation (AMT - Free Report) has priced a public offering of two different issues of unsecured senior notes. Specifically, the 2030 notes, with an aggregate principal amount of $800 million, carry an interest rate of 1.875% per annum, and have been priced at 99.554% of the face value.
Another offering of 2050 senior notes, with an aggregate principal amount of $300 million, will be consolidated with the company’s outstanding $750 million 3.100% senior unsecured notes due 2050 issued on Jun 3, 2020, and has been priced at 101.972% of the face value.
Net proceeds from the offering are estimated to be $1,092.1 million, after deducting the estimated offering expenses and underwriting discounts.
American Tower intends to allocate net proceeds from the offering to reduce the outstanding balance under its $2.35-billion senior unsecured revolving credit facility, which was amended and restated in December 2019. Additionally, the company will use the proceeds to repay the balance under its $1.19-billion senior unsecured term loan that it entered in April 2020.
The company’s efforts to tap the debt market amid the low rate environment and in such testing times are a strategic fit. Furthermore, the new debt will result in lower funding costs, since unsecured notes can now be borrowed at lower rates.
Markedly, as of the second-quarter end, American Tower enjoyed investment-grade credit rating of BBB-, BBB+ and Baa3 as well as a stable outlook from Standard & Poor’s, Fitch and Moody’s, respectively. This enables the company to access the debt market at favorable terms.
Further, at the end of the second quarter, the company had $6.5 billion of total liquidity, which comprised $2 billion in cash and cash equivalents, and availability of $4.5 billion under its numerous revolving credit facilities (net of any outstanding letters of credit). This supports its debt servicing ability.
However, customer concentration is high for American Tower, with AT&T, Verizon Wireless and T-Mobile being the company’s top three customers, accounting for 51% of its total property segment revenues as of second-quarter 2020. The loss of any of these customers, consolidation among them or reduction in network spending leads to a material impact on the company’s top line.
Shares of this Zacks Rank #3 (Hold) company have gained 8% over the past year as against the industry's 10.7% decline.
Sabra Healthcare REIT, Inc.’s (SBRA - Free Report) FFO per share estimate for 2020 has been revised 1.8% upward to $1.74 over the past month. The company currently carries a Zacks Rank of 2.
Physicians Realty Trust’s (DOC - Free Report) FFO per share estimate for the current year has been marginally revised upward to $1.06 over the past month. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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American Tower to Raise $1.09B With Senior Notes Offering
American Tower Corporation (AMT - Free Report) has priced a public offering of two different issues of unsecured senior notes. Specifically, the 2030 notes, with an aggregate principal amount of $800 million, carry an interest rate of 1.875% per annum, and have been priced at 99.554% of the face value.
Another offering of 2050 senior notes, with an aggregate principal amount of $300 million, will be consolidated with the company’s outstanding $750 million 3.100% senior unsecured notes due 2050 issued on Jun 3, 2020, and has been priced at 101.972% of the face value.
Net proceeds from the offering are estimated to be $1,092.1 million, after deducting the estimated offering expenses and underwriting discounts.
American Tower intends to allocate net proceeds from the offering to reduce the outstanding balance under its $2.35-billion senior unsecured revolving credit facility, which was amended and restated in December 2019. Additionally, the company will use the proceeds to repay the balance under its $1.19-billion senior unsecured term loan that it entered in April 2020.
The company’s efforts to tap the debt market amid the low rate environment and in such testing times are a strategic fit. Furthermore, the new debt will result in lower funding costs, since unsecured notes can now be borrowed at lower rates.
Markedly, as of the second-quarter end, American Tower enjoyed investment-grade credit rating of BBB-, BBB+ and Baa3 as well as a stable outlook from Standard & Poor’s, Fitch and Moody’s, respectively. This enables the company to access the debt market at favorable terms.
Further, at the end of the second quarter, the company had $6.5 billion of total liquidity, which comprised $2 billion in cash and cash equivalents, and availability of $4.5 billion under its numerous revolving credit facilities (net of any outstanding letters of credit). This supports its debt servicing ability.
However, customer concentration is high for American Tower, with AT&T, Verizon Wireless and T-Mobile being the company’s top three customers, accounting for 51% of its total property segment revenues as of second-quarter 2020. The loss of any of these customers, consolidation among them or reduction in network spending leads to a material impact on the company’s top line.
Shares of this Zacks Rank #3 (Hold) company have gained 8% over the past year as against the industry's 10.7% decline.
Stocks to Consider
Alpine Income Property Trust, Inc.’s (PINE - Free Report) Zacks Consensus Estimate for the ongoing-year funds from operations (FFO) per share moved 2.6% north to $1.18 in the past month. The stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sabra Healthcare REIT, Inc.’s (SBRA - Free Report) FFO per share estimate for 2020 has been revised 1.8% upward to $1.74 over the past month. The company currently carries a Zacks Rank of 2.
Physicians Realty Trust’s (DOC - Free Report) FFO per share estimate for the current year has been marginally revised upward to $1.06 over the past month. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>