Fitch Rates American Tower's $500MM Term Loan Facility 'BB+'

Business Wire, Sept 4, 2007

CHICAGO -- Fitch Ratings has assigned a 'BB+' rating to American Tower Corporation's (AMT) proposed five-year $500 million senior term loan facility. Proceeds from the term loan facility will be used to refinance existing indebtedness under the senior unsecured revolving credit facility and for other general corporate purposes. The Rating Outlook is Stable.

AMT's ratings reflect the scale in its operations, which has translated into strong operating performance and increased free cash flow. AMT's operating characteristics remain favorable, resulting in some of the highest profitability measures for all of corporate credits and reflective of the lower business risk that results in a predictable and growing cash flow stream generated primarily from investment grade national wireless operators. Fitch believes these characteristics more than offset AMT's sizable share repurchase program and the higher financial leverage for its rating category. AMT should continue to meaningfully improve its operating metrics due to scale benefits and the expectations for continued wireless industry demand. Fitch expects the 700 MHz auctions, scheduled to begin in January 2008, will be an important driver for future revenue growth. Given the mandates associated with the spectrum auction, Fitch believes that two new entrants could acquire a material amount of spectrum for large scale deployments.

Based on current capital allocation plans, Fitch expects leverage for 2007 to be 4.5 times (x) or less. The liquidity position is solid owing to its free cash flow, cash on hand and undrawn revolver capacity when including the new facility. Free cash flow for the last twelve months was in excess of $500 million. The sizable $1.5 billion share repurchase program will be funded by free cash flow, existing cash and debt. As of July 26, 2007, AMT had repurchased a total of 16.7 million shares of its class A common stock for an aggregate of $678.1 million. AMT expects to complete the share repurchase program by February 2008.

The new term loan facility will provide AMT with additional liquidity since the company had drawn approximately $1 billion of the $1.25 billion as of June 30, 2007, on its senior unsecured revolving credit facility that matures in 2012. The financial covenants for the new term loan facility are similar to the terms of the existing $1.25 billion revolver, which includes the following: senior secured leverage ratio of 3.0x, total borrower leverage ratio of 6.0x and interest coverage ratio of 2.5x. The senior secured leverage covenant of 3.0x provides additional capacity for future tower securitizations. The new term facility will also be subject to mandatory prepayment with proceeds from any capital markets issuance. Fitch expects any new long-term debt to be issued by AMT.

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