American Tower Enters Term Loan - Analyst Blog

By Zacks | July 03, 2012 AAA

In order to reduce its existing indebtedness, American Tower Corporation (AMT), a real estate investment trust (REIT), recently announced that its entering into an unsecured term loan worth $750.0 million. The term loan, which is scheduled to mature on June 29, 2017, bears an interest rate equivalent to LIBOR plus 1.75%. American Tower received approximately $746.4 million from the term loan, of which approximately $632.0 million were used to repay its outstanding loan under one of its unsecured revolving credit facilities. The company intends to use the remaining amount for general corporate purposes.

As of March 31, 2012, the company had cash and cash equivalents of $0.5 billion and borrowing ability of approximately $1.3 billion under its revolving credit facilities. With the latest transaction, the company will now have a borrowing capacity of approximately $2.0 billion under its revolving credit facilities (net of any outstanding letters of credit).

Boston, Massachusetts-based American Tower engages in ownership and development of communications sites. As of March 31, 2012, the company owned and operated around 47,000 communication sites across United States and in Brazil, Chile, Colombia, Ghana, India, Mexico, Peru and South Africa on the international front.

American Tower, which competes with the likes of Winthrop Realty Trust (FUR) and STAG Industrial, Inc. (STAG), will likely release its second quarter 2012 earnings on July 30, 2012. The Zacks Consensus Estimate for the second quarter 2012 FFO (fund from operations) is pegged at 41 cents per share. We presently have a long-term Neutral recommendation and Zacks #3 Rank (a short-term Hold rating) for the company.

 
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