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Fitch Affirms Six Series of Crown Castle Senior Secured Tower Rev NotesFitch Ratings has affirmed the Crown Castle Towers LLC senior secured tower revenue notes, series 2010-2, 2010-3, 2010-5, 2010-6, 2015-1 and 2015-2 as follows: --$350,000,000 class 2010-2 C-2017 at 'Asf'; Outlook Stable; --$1,250,000,000 class 2010-3 C-2020 at 'Asf'; Outlook Stable; --$300,000,000 class 2010-5 C-2017 at 'Asf'; Outlook Stable; --$1,000,000,000 class 2010-6 C-2020 at 'Asf'; Outlook Stable; --$300,000,000 class 2015-1 C-2022 'Asf'; Outlook Stable; --$700,000,000 class 2015-2 C-2025 'Asf'; Outlook Stable. Fitch affirms the series 2010-2, 2010-3, 2010-5 & 2010-6 notes as part of the issuance of the Crown Castle Senior Secured 2015-1 and 2015-2 notes issued on May 15, 2015. The 2010-2, 2010-3, 2010-5 & 2010-6 classes are pari passu with the 2015-1 and 2015-2 classes. The 2010-1 and 2010-4 classes have paid in full. The affirmation of the 2015 notes is to ensure that the classes which share common underlying collateral have the same rating effective date. The transaction is an issuance of notes backed by the issuers' equity interest in the entities that own, lease, sublease and operate 11,000 wireless communication sites. The Crown Castle senior secured tower revenue notes, series 2015-1 and 2015-2, will be issued pursuant to indenture supplements as additional debt securities and consist of two new series of notes under the original indenture dated June 1, 2005. KEY RATING DRIVERS Trust Leverage: Fitch's net cash flow (NCF) is $653.8 million, approximately 3.5% below the issuer's NCF, implying a Fitch stressed debt service coverage ratio (DSCR) of 1.81x. The debt multiple relative to Fitch's NCF is 6.0x, which equates to a debt yield of 16.8%. Leases to Strong Tower Tenants: There are 30,471 wireless tenant leases. Telephony tenants (wireless, voice and data) represent 96.3% of the leases on the cellular sites, and 57.8% of the annualized run rate revenue (ARRR) is from investment-grade tenants. The tenant leases have weighted average annual escalators of approximately 3% - 4% and a weighted average final remaining term (including renewals) of 27.2 years. The largest tenant, AT&T (News - Alert) (31.5% of ARRR), is rated investment grade by Fitch (long-term Issuer Default Rating [IDR] of 'A-'/Stable Outlook). Security Interest: The notes are secured by a first-priority security interest in the equity of issuers. The security interests are perfected by both the physical possession of the certificates of the issuers and the filing of the financing statements under the Uniform Commercial Code (UCC). The security interests in the equity of the issuers provide noteholders with the ability to foreclose on the ownership of the issuers and their assets pledged as collateral in the event of default. The DSCR parameters reflect the collateral of the transaction. The notes are not secured by mortgages on the assets. RATING SENSITIVITIES Fitch erformed several stress scenarios in which Fitch's NCF was stressed. Fitch determined that a 70.4% reduction in Fitch's NCF would cause the notes to break even at 1.0x DSCR on an interest-only basis. Fitch evaluated the sensitivity of the ratings for classes 2015-1 and 2015-2, and a 9.0% decline in NCF would result in a one-category downgrade, while an 17.2% decline would result in a downgrade to below investment grade. The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities. Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'. Additional information is available at 'www.fitchratings.com'. A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following reports: --'Crown Castle Senior Secured Tower Revenue Notes, Series 2010-1, 2010-2 and 2010-3' (Jan. 21, 2010); --'Crown Castle Senior Secured Tower Revenue Notes, Series 2010-1, 2010-2 and 2010-3 -- Appendix' (Jan. 21, 2010); --'Crown Castle Senior Secured Tower Revenue Notes, Series 2010-4, 2010-5 and 2010-6' (Aug. 19, 2010); --'Crown Castle Senior Secured Tower Revenue Notes, Series 2010-4, 2010-5 and 2010-6 -- Appendix' (Aug. 19, 2010); --'Crown Castle Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2' (April 30, 2015); --'Crown Castle Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 -- Appendix' (April 30, 2015). Applicable Criteria and Related Research: --'Global Structured Finance Rating Criteria' (March 2015); --'Criteria for Analyzing U.S. Wireless Tower Transactions' (March 2015). Applicable Criteria and Related Research: Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268 Criteria for Analyzing U.S. Wireless Tower Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863223 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984962 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. View source version on businesswire.com: http://www.businesswire.com/news/home/20150519006978/en/ |
