Debt | 9 Months Ended |
Sep. 30, 2013 |
Debt Disclosure [Abstract] | ' |
Debt | ' |
9 | DEBT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The carrying and principal values of debt consist of the following (in thousands): |
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| | | | As of | | | As of | | | | | | | | | | | | | | | |
September 30, 2013 | December 31, 2012 | | | | | | | | | | | | | | |
| | Maturity | | Principal | | | Carrying | | | Principal | | | Carrying | | | | | | | | | | | | | | | |
Date | Balance | Value | Balance | Value | | | | | | | | | | | | | | |
| | | | (in thousands) | | | | | | | | | | | | | | | |
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1.875% Convertible Senior Notes | | 1-May-13 | | $ | — | | | $ | — | | | $ | 468,836 | | | $ | 457,351 | | | | | | | | | | | | | | | |
4.000% Convertible Senior Notes | | Oct. 1, 2014 | | | 499,947 | | | | 458,535 | | | | 499,987 | | | | 430,751 | | | | | | | | | | | | | | | |
8.250% Senior Notes | | Aug. 15, 2019 | | | 243,750 | | | | 242,340 | | | | 243,750 | | | | 242,205 | | | | | | | | | | | | | | | |
5.625% Senior Notes | | Oct. 1, 2019 | | | 500,000 | | | | 500,000 | | | | 500,000 | | | | 500,000 | | | | | | | | | | | | | | | |
5.750% Senior Notes | | 15-Jul-20 | | | 800,000 | | | | 800,000 | | | | 800,000 | | | | 800,000 | | | | | | | | | | | | | | | |
4.254% Secured Tower Revenue Securities Series 2010-1 | | April 15, 2015 | | | 680,000 | | | | 680,000 | | | | 680,000 | | | | 680,000 | | | | | | | | | | | | | | | |
5.101% Secured Tower Revenue Securities Series 2010-2 | | 17-Apr-17 | | | 550,000 | | | | 550,000 | | | | 550,000 | | | | 550,000 | | | | | | | | | | | | | | | |
2.933% Secured Tower Revenue Securities Series 2012-1 | | Dec. 15, 2017 | | | 610,000 | | | | 610,000 | | | | 610,000 | | | | 610,000 | | | | | | | | | | | | | | | |
2.240% Secured Tower Revenue Securities Series 2013-1C | | 17-Apr-18 | | | 425,000 | | | | 425,000 | | | | — | | | | — | | | | | | | | | | | | | | | |
3.722% Secured Tower Revenue Securities Series 2013-2C | | 17-Apr-23 | | | 575,000 | | | | 575,000 | | | | — | | | | — | | | | | | | | | | | | | | | |
3.598% Secured Tower Revenue Securities Series 2013-1D | | 17-Apr-18 | | | 330,000 | | | | 330,000 | | | | — | | | | — | | | | | | | | | | | | | | | |
Revolving Credit Facility | | 9-May-17 | | | — | | | | — | | | | 100,000 | | | | 100,000 | | | | | | | | | | | | | | | |
2011 Term Loan B | | 30-Jun-18 | | | 180,529 | | | | 180,218 | | | | 492,500 | | | | 491,518 | | | | | | | | | | | | | | | |
2012-1 Term Loan A | | 9-May-17 | | | 187,500 | | | | 187,500 | | | | 195,000 | | | | 195,000 | | | | | | | | | | | | | | | |
2012-2 Term Loan B | | Sept. 28, 2019 | | | 109,971 | | | | 109,735 | | | | 300,000 | | | | 299,278 | | | | | | | | | | | | | | | |
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Total debt | | | | | 5,691,697 | | | | 5,648,328 | | | | 5,440,073 | | | | 5,356,103 | | | | | | | | | | | | | | | |
Less: current maturities of long-term debt | | | | | | | | | (11,250 | ) | | | | | | | (475,351 | ) | | | | | | | | | | | | | | |
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Total long-term debt, net of current maturities | | | $ | 5,637,078 | | | | | | | $ | 4,880,752 | | | | | | | | | | | | | | | |
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The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented: |
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| | Three months ended | | | Three months ended | | | Nine months ended | | | Nine months ended | |
| | September 30, 2013 | | September 30, 2012 | | September 30, 2013 | | September 30, 2012 |
| | Cash | | | Non-cash | | | Cash | | | Non-cash | | | Cash | | | Non-cash | | | Cash | | | Non-cash | |
Interest | Interest | Interest | Interest | Interest | Interest | Interest | Interest |
| | (in thousands) | | | (in thousands) | | | (in thousands) | | | (in thousands) | |
1.875% Convertible Senior Notes | | $ | — | | | $ | — | | | $ | 2,508 | | | $ | 9,339 | | | $ | 2,670 | | | $ | 10,434 | | | $ | 7,523 | | | $ | 27,375 | |
4.0% Convertible Senior Notes | | | 4,999 | | | | 9,570 | | | | 5,000 | | | | 8,412 | | | | 14,999 | | | | 28,446 | | | | 15,000 | | | | 24,448 | |
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8.0% Senior Notes | | | — | | | | — | | | | 3,142 | | | | 35 | | | | — | | | | — | | | | 15,867 | | | | 174 | |
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8.25% Senior Notes | | | 5,027 | | | | 46 | | | | 5,027 | | | | 42 | | | | 15,082 | | | | 135 | | | | 18,150 | | | | 149 | |
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5.625% Senior Notes | | | 7,031 | | | | — | | | | 234 | | | | — | | | | 21,094 | | | | — | | | | 234 | | | | — | |
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5.75% Senior Notes | | | 11,500 | | | | — | | | | 10,094 | | | | — | | | | 34,500 | | | | — | | | | 10,094 | | | | — | |
2010 Secured Tower Revenue Securities | | | 14,349 | | | | — | | | | 14,344 | | | | — | | | | 43,037 | | | | — | | | | 43,032 | | | | — | |
2012 Secured Tower Revenue Securities | | | 4,521 | | | | — | | | | 2,612 | | | | — | | | | 13,564 | | | | — | | | | 2,612 | | | | — | |
2013 Secured Tower Revenue Securities | | | 10,804 | | | | — | | | | — | | | | — | | | | 19,588 | | | | — | | | | — | | | | — | |
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Revolving Credit Facility | | | 856 | | | | — | | | | 849 | | | | — | | | | 3,338 | | | | — | | | | 3,558 | | | | — | |
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2011 Term Loan | | | 1,730 | | | | 16 | | | | 4,743 | | | | 45 | | | | 8,802 | | | | 85 | | | | 14,163 | | | | 134 | |
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2012-1 Term Loan | | | 1,123 | | | | — | | | | 1,403 | | | | — | | | | 3,516 | | | | — | | | | 2,262 | | | | — | |
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2012-2 Term Loan | | | 1,054 | | | | 10 | | | | 94 | | | | 1 | | | | 5,362 | | | | 51 | | | | 94 | | | | 1 | |
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Mobilitie Bridge Loan | | | — | | | | — | | | | 499 | | | | — | | | | — | | | | — | | | | 4,239 | | | | — | |
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Other | | | (7 | ) | | | — | | | | 29 | | | | — | | | | 17 | | | | — | | | | (100 | ) | | | — | |
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Total | | $ | 62,987 | | | $ | 9,642 | | | $ | 50,578 | | | $ | 17,874 | | | $ | 185,569 | | | $ | 39,151 | | | $ | 136,728 | | | $ | 52,281 | |
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Revolving Credit Facility under the Senior Credit Agreement |
The Revolving Credit Facility is governed by the Senior Credit Agreement. As of September 30, 2013, the Revolving Credit Facility consists of a revolving loan under which up to $770.0 million aggregate principal amount may be borrowed, repaid and redrawn, subject to compliance with specific financial ratios and the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest at the Eurodollar Rate plus a margin that ranges from 187.5 basis points to 237.5 basis points or at a Base Rate plus a margin that ranges from 87.5 basis points to 137.5 basis points, in each case based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement. If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, May 9, 2017. The proceeds available under the Revolving Credit Facility may be used for general corporate purposes. A per annum commitment fee of 0.375% to 0.5% of the unused commitments under the Revolving Credit Facility is charged based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA (calculated in accordance with the Senior Credit Agreement). SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of a period may not be reflective of the total amounts outstanding during such period. |
On August 27, 2013, SBA Senior Finance II entered into a Sixth Amendment to the Senior Credit Agreement with the lenders parties thereto and the Administrative Agent. The Sixth Amendment amended the Senior Credit Agreement to, among other things, (i) increase the existing Consolidated Total Debt to Annualized Borrower EBITDA ratio maintenance covenant from 6.0x to 6.5x and (ii) proportionately adjust various leverage-based covenants, including mandatory repayments and restrictions on acquired indebtedness, general disposition of assets, restricted payments, and general investments. |
In addition, the Sixth Amendment modified the incremental capacity of the Revolving Credit Facility and Term Loan Facility from a fixed cap to an incurrence-based availability test which permits SBA Senior Finance II to request that one or more lenders provide (i) additional commitments under the Revolving Credit Facility and (ii) additional term loans, in each case without requesting the consent of the other lenders provided that after giving effect to the proposed increase in Revolving Credit Facility commitments or incremental term loans the ratio of Consolidated Total Debt to Annualized Borrower EBITDA would not exceed 6.5x. In addition, the amendment modified the percentage of allowable annualized borrower EBITDA for foreign subsidiaries from 10.0% to 35.0%. |
As of September 30, 2013, there was no amount outstanding under the Revolving Credit Facility and the availability under the Revolving Credit Facility was $770.0 million, subject to compliance with specified financial ratios and satisfaction of other customary conditions to borrowing. |
Term Loans under the Senior Credit Agreement |
2011 Term Loan B |
The 2011 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $500.0 million that matures on June 30, 2018. The 2011 Term Loan accrues interest, at SBA Senior Finance II’s election, at either the Base Rate plus a margin of 175 basis points (with a Base Rate floor of 2%) or Eurodollar Rate plus a margin of 275 basis points (with a Eurodollar Rate floor of 1%). As of September 30, 2013, the 2011 Term Loan was accruing interest at 3.75% per annum. SBA Senior Finance II has the ability to prepay any or all amounts under the 2011 Term Loan without premium or penalty. The 2011 Term Loan was issued at 99.75% of par value. The Company incurred deferred financing fees of $4.9 million associated with this transaction which are being amortized through the maturity date. |
During the nine months ended September 30, 2013, the Company repaid $312.0 million on the 2011 Term Loan. Included in this amount was a prepayment of $310.7 million made on April 24, 2013 using proceeds from the 2013 Tower Securities. In connection with the prepayment, the Company expensed $2.3 million of net deferred financing fees and $0.6 million of discount related to the debt. As a result of the prepayment, no further scheduled quarterly principal payments are required until the maturity date. As of September 30, 2013, the 2011 Term Loan had a principal balance of $180.5 million. The remaining $1.2 million of deferred financing fees, net are being amortized through the maturity date. |
2012-1 Term Loan A |
The 2012-1 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $200.0 million that matures on May 9, 2017. The 2012-1 Term Loan accrues interest, at SBA Senior Finance II’s election, at either the Base Rate plus a margin that ranges from 100 to 150 basis points or the Eurodollar Rate plus a margin that ranges from 200 to 250 basis points, in each case based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA (calculated in accordance with the Senior Credit Agreement). As of September 30, 2013, the 2012-1 Term Loan was accruing interest at 2.18% per annum. Principal payments on the 2012-1 Term Loan commenced on September 30, 2012 and are being made in quarterly installments on the last day of each March, June, September and December, in an amount equal to $2.5 million for each of the first eight quarters, $3.75 million for the next four quarters and $5.0 million for each quarter thereafter. SBA Senior Finance II has the ability to prepay any or all amounts under the 2012-1 Term Loan without premium or penalty. To the extent not previously repaid, the 2012-1 Term Loan will be due and payable on the maturity date. The 2012-1 Term Loan was issued at par. The Company incurred deferred financing fees of $2.7 million in relation to this transaction which are being amortized through the maturity date. |
During the three and nine months ended September 30, 2013, the Company repaid $2.5 million and $7.5 million, respectively, on the 2012-1 Term Loan. As of September 30, 2013, the 2012-1 Term Loan had a principal balance of $187.5 million. |
2012-2 Term Loan B |
The 2012-2 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $300.0 million that matures on September 28, 2019. The 2012-2 Term Loan accrues interest, at SBA Senior Finance II’s election, at either the Base Rate plus 175 basis points (with a Base Rate floor of 2%) or Eurodollar Rate plus 275 basis points (with a Eurodollar Rate floor of 1%). As of September 30, 2013, the 2012-2 Term Loan was accruing interest at 3.75% per annum. SBA Senior Finance II has the ability to prepay any or all amounts under the 2012-2 Term Loan without premium or penalty. To the extent not previously repaid, the 2012-2 Term Loan will be due and payable on the maturity date. The 2012-2 Term Loan was issued at 99.75% of par value. The Company incurred deferred financing fees of approximately $3.5 million in relation to this transaction which are being amortized through the maturity date. |
During the nine months ended September 30, 2013, the Company repaid $190.0 million on the 2012-2 Term Loan. Included in this amount was a prepayment of $189.3 million made on April 24, 2013 using proceeds from the 2013 Tower Securities. In connection with the prepayment, the Company expensed $2.0 million of net deferred financing fees and $0.4 million of discount related to the debt. As a result of the prepayment, no further scheduled quarterly principal payments are required until the maturity date. As of September 30, 2013, the 2012-2 Term Loan had a principal balance of $110.0 million. The remaining $1.1 million of deferred financing fees, net are being amortized through the maturity date. |
Secured Tower Revenue Securities |
2010 Tower Securities |
On April 16, 2010, a New York common law trust (the “Trust”) issued $680.0 million of 2010-1 Tower Securities and $550.0 million of 2010-2 Tower Securities (together the “2010 Tower Securities”). The 2010-1 Tower Securities have an annual interest rate of 4.254% and the 2010-2 Tower Securities have an annual interest rate of 5.101%. The weighted average annual fixed interest rate of the 2010 Tower Securities is 4.7%, including borrowers’ fees, payable monthly. The anticipated repayment date and the final maturity date for the 2010–1 Tower Securities is April 15, 2015 and April 16, 2040, respectively. The anticipated repayment date and the final maturity date for the 2010–2 Tower Securities is April 17, 2017 and April 15, 2042, respectively. The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of the Borrowers. The Company has incurred deferred financing fees of $18.0 million in relation to this transaction which are being amortized through the anticipated repayment date of each of the 2010 Tower Securities. |
2012-1 Tower Securities |
On August 9, 2012, the Company, through the Trust, issued $610.0 million of Secured Tower Revenue Securities Series 2012-1 (the “2012-1 Tower Securities”) which have an anticipated repayment date of December 15, 2017 and a final maturity date of December 15, 2042. The fixed interest rate of the 2012-1 Tower Securities is 2.933% per annum, payable monthly. The Company has incurred deferred financing fees of $14.9 million in relation to this transaction which are being amortized through the anticipated repayment date of the 2012-1 Tower Securities. |
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2013 Tower Securities |
On April 18, 2013, the Company, through the Trust, issued $425.0 million of 2.240% Secured Tower Revenue Securities Series 2013-1C which have an anticipated repayment date of April 2018 and a final maturity date of April 2043, $575.0 million of 3.722% Secured Tower Revenue Securities Series 2013-2C which have an anticipated repayment date of April 2023 and a final maturity date of April 2048, and $330.0 million of 3.598% Secured Tower Revenue Securities Series 2013-1D which have an anticipated repayment date of April 2018 and a final maturity date of April 2043 (collectively the “2013 Tower Securities”). The aggregate $1.33 billion of 2013 Tower Securities have a blended interest rate of 3.218% and a weighted average life through the anticipated repayment date of 7.2 years. The Company has incurred deferred financing fees of $25.1 million in relation to this transaction which are being amortized through the anticipated repayment date. |
Net proceeds from this offering were used to repay the $100 million outstanding balance under the Company’s Revolving Credit Facility, $310.7 million of the 2011 Term Loan, and $189.3 million of the 2012-2 Term Loan under the Company’s Senior Credit Agreement. The remaining net proceeds were used to satisfy unhedged obligations in connection with the Company’s 1.875% Convertible Senior Notes. |
As of September 30, 2013, the Borrowers met the required Debt Service Coverage Ratio and were in compliance with all other covenants as set forth in the mortgage loan agreement. |
1.875% Convertible Senior Notes due 2013 |
On May 16, 2008, the Company issued $550.0 million of its 1.875% Convertible Senior Notes (the “1.875% Notes”). Interest was payable semi-annually on May 1 and November 1, and the 1.875% Notes matured on May 1, 2013. The 1.875% Notes were convertible, at the holder’s option, into shares of the Company’s Class A common stock, at an initial conversion rate of 24.1196 shares of Class A common stock per $1,000 principal amount of 1.875% Notes (subject to certain customary adjustments), which is equivalent to an initial conversion price of approximately $41.46 per share or a 20% conversion premium based on the last reported sale price of $34.55 per share of Class A common stock on the Nasdaq Global Select Market on May 12, 2008, the purchase agreement date. |
Prior to the final settlement period, which began on February 22, 2013, the Company converted $18.1 million in principal of the 1.875% Notes. These notes were converted and settled with the issuance of 437,134 shares of SBA common stock pursuant to the terms of the Indenture. In connection with these conversions, the related convertible note hedges and a portion of the common stock warrants were settled. As a result, the Company received a net 71,054 shares of SBA Class A common stock. |
Pursuant to the terms of the indenture, on February 1, 2013, SBA provided notice to the trustee and holders of its 1.875% Notes that it elected to settle 100% of its future conversion obligations pursuant to the Indenture governing the 1.875% Notes in cash, effective February 4, 2013. |
During the final settlement period, the Company received additional conversion notices from holders of an aggregate of $450.6 million in principal of the 1.875% Notes (excluding $81.2 million in principal of the notes held by a subsidiary of the Company which were also converted). Pursuant to the terms of the Indenture, these notes were converted at a price of $1,764.02 per $1,000 of principal or an aggregate of $794.8 million which were settled in cash. The remaining $142,000 aggregate principal amount of 1.875% Notes that was not converted matured on May 1, 2013 and settled in cash at principal plus accrued interest. |
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Concurrently with the settlement of the Company’s conversion obligation, the Company settled the convertible note hedges that the Company had initially entered into at the time the outstanding 1.875% Notes were issued. In connection with the settlement of these hedges, the Company received an aggregate of $182.9 million in cash. |
During the three and nine months ended September 30, 2013, the Company paid $18.8 million and $42.4 million in cash, respectively, and issued 200,016 shares to settle the related warrants. These warrants have a strike price of $67.37 per share. Subsequent to September 30, 2013, the Company settled the remaining warrants by paying $55.5 million in cash and issuing 192,516 shares of the Company’s Class A common stock. |
During the third quarter, the Company sold its claim against Lehman Brothers, related to a hedge terminated when Lehman Brothers filed for bankruptcy in 2008, for $27.3 million and recorded a gain on the transaction of the same amount. The gain has been recorded within Other Income, net in accompanying Consolidated Statement of Operations. |
4.0% Convertible Senior Notes due 2014 |
On April 24, 2009, the Company issued $500.0 million of its 4.0% Convertible Senior Notes (“4.0% Notes”) in a private placement transaction. Interest on the 4.0% Notes is payable semi-annually on April 1 and October 1. The maturity date of the 4.0% Notes is October 1, 2014. The Company incurred fees of $11.7 million with the issuance of the 4.0% Notes of which $7.7 million was recorded as deferred financing fees and $4.0 million was recorded as a reduction to shareholders’ equity. |
The 4.0% Notes are convertible, at the holder’s option, into shares of the Company’s Class A common stock, at an initial conversion rate of 32.9164 shares of the Company’s Class A common stock per $1,000 principal amount of 4.0% Notes (subject to certain customary adjustments), which is equivalent to an initial conversion price of approximately $30.38 per share or a 22.5% conversion premium based on the last reported sale price of $24.80 per share of our Class A common stock on the Nasdaq Global Select Market on April 20, 2009, the purchase agreement date. |
Concurrently with the pricing of the 4.0% Notes, the Company entered into convertible note hedge and warrant transactions with affiliates of certain of the initial purchasers of the convertible notes. The initial strike price of the convertible note hedge transactions relating to the 4.0% Notes is $30.38 per share of the Company’s Class A common stock (the same as the initial conversion price of the 4.0% Notes) and the upper strike price of the warrant transactions is $44.64 per share. |
The Company is amortizing the debt discount on the 4.0% Notes utilizing the effective interest method over the life of the 4.0% Notes which increases the effective interest rate of the 4.0% Notes from its coupon rate of 4.0% to 12.9%. As of September 30, 2013 and December 31, 2012, the carrying amount of the equity component related to the 4.0% Notes was $169.0 million. |
The 4.0 % Notes are reflected in long-term debt in the Company’s Consolidated Balance Sheets at their carrying value. The following table summarizes the balances for the 4.0% Notes: |
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| | As of | | | As of | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal balance | | $ | 499,947 | | | $ | 499,987 | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt discount | | | (41,412 | ) | | | (69,236 | ) | | | | | | | | | | | | | | | | | | | | | | | | |
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Carrying value | | $ | 458,535 | | | $ | 430,751 | | | | | | | | | | | | | | | | | | | | | | | | | |
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The 4.0% Notes are convertible only under the following circumstances: |
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| • | | during any calendar quarter, if the last reported sale price of the Company’s Class A common stock for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the preceding calendar quarter is more than 130% of the applicable conversion price per share of Class A common stock on the last day of such preceding calendar quarter, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| • | | during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the 4.0% Notes for each day in the measurement period was less than 95% of the product of the last reported sale price of Class A common stock and the applicable conversion rate, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| • | | if specified distributions to holders of Class A common stock are made or specified corporate transactions occur, and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| • | | at any time on or after July 22, 2014. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Upon conversion, the Company has the right to settle its conversion obligation in cash, shares of Class A common stock, or a combination of cash and shares of its Class A common stock. From time to time, upon notice to the holders of the 4.0% Notes, the Company may change its election regarding the form of consideration that it will use to settle its conversion obligation; provided, however, that the Company is not permitted to change its settlement election after July 21, 2014 for the 4.0% Notes. At the time of the issuance of the 4.0% Notes, the Company elected to settle its conversion obligations in stock. As of September 30, 2013, the Company has not changed its election. |
During the three and nine month ended September 30, 2013, the 4.0% Notes were convertible based on the fact that the Company’s Class A common stock closing price per share exceeded $39.49 for at least 20 trading days during the 30 consecutive trading day period during the last month of the prior quarter. As a result of conversions exercised by holders pursuant to the terms of the indenture, during the nine months ended September 30, 2013, the Company converted $40,000 in principal amount of 4.0% Notes and settled its conversion obligation through the issuance of 1,307 shares of Class A common stock. In connection with these conversions, the related convertible note hedges and a portion of the common stock warrants were settled. As a result, the Company received a net 593 shares of SBA Class A common stock. In addition, the Company has received conversion notices totaling $3,000 in principal amount of the 4.0% Notes during the third quarter of 2013, which will settle during the fourth quarter of 2013 in shares of the Company’s Class A common stock and cash for fractional shares. |
Senior Notes |
8.0% Senior Notes and 8.25% Senior Notes |
On July 24, 2009, the Company’s wholly-owned subsidiary, SBA Telecommunications, LLC (formerly known as SBA Telecommunications, Inc.) (“Telecommunications”), issued $750.0 million of unsecured senior notes (the “Senior Notes”), $375.0 million of which were due August 15, 2016 (the “8.0% Notes”) and $375.0 million of which are due August 15, 2019 (the “8.25% Notes”). The 8.0% Notes had an interest rate of 8.00% per annum and were issued at a price of 99.330% of their face value. The 8.25% Notes have an interest rate of 8.25% per annum and were issued at a price of 99.152% of their face value. Interest on each of the Senior Notes was due semi-annually on February 15 and August 15 of each year beginning on February 15, 2010. The Company incurred deferred financing fees of $5.4 million in relation to the 8.25% Notes which are being amortized through the anticipated repayment date. |
Net proceeds of this offering were $727.8 million after deducting expenses and the original issue discount. The Company was amortizing the debt discount on the Senior Notes utilizing the effective interest method over the life of the 8.0% Notes and 8.25% Notes. |
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On April 13, 2012, the Company used the proceeds of an equity offering to redeem $131.3 million in aggregate principal amount of its 8.0% Notes and $131.3 million in aggregate principal amount of its 8.25% Notes and to pay $21.3 million as a premium on the redemption of the notes. The Company expensed $1.5 million and $4.3 million of debt discount and deferred financing fees, respectively, related to the redemption of the notes. |
On August 29, 2012, the Company redeemed the remaining $243.8 million principal balance of the 8.0% Notes plus paid $14.6 million in applicable premium on the redemption of the notes. The Company expensed $1.0 million and $3.4 million of debt discount and deferred financing fees, respectively, related to the redemption of the notes. |
As of September 30, 2013, the principal balance of the 8.25% Notes was $243.8 million and the carrying value was $242.3 million. |
5.75% Senior Notes |
On July 13, 2012, Telecommunications issued $800.0 million of unsecured senior notes (the “5.75% Notes”) due July 15, 2020. The Notes accrue interest at a rate of 5.75% and were issued at par. Interest on the 5.75% Notes is due semi-annually on July 15 and January 15 of each year beginning on January 15, 2013. The Company has incurred deferred financing fees of $14.0 million in relation to this transaction which are being amortized through the maturity date. The Company used the net proceeds from this offering to (1) repay all amounts outstanding under the Mobilitie Bridge Loan and (2) repay all amounts outstanding under its Revolving Credit Facility. The remaining proceeds were used for general corporate purposes. |
In connection with the issuance of the 5.75% Notes, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with J.P. Morgan Securities LLC, as representative of the Initial Purchasers. Pursuant to the terms of the Registration Rights Agreement, the Company and Telecommunications filed and declared effective a registration statement with respect to an offer to exchange the 5.75% Notes for new notes guaranteed by the Company registered under the Securities Act of 1933, as amended (the “Securities Act”), on May 31, 2013. The exchange offer was consummated on July 5, 2013. |
5.625% Senior Notes |
On September 28, 2012, the Company issued $500.0 million of unsecured senior notes (the “5.625% Notes”) due October 1, 2019. The 5.625% Notes accrue interest at a rate of 5.625% per annum and were issued at par. Interest on the 5.625% Notes is due semi-annually on October 1 and April 1 of each year beginning on April 1, 2013. The Company has incurred deferred financing fees of $8.5 million in relation to this transaction which are being amortized through the maturity date. The Company used the proceeds from the issuance of the 5.625% Notes to pay a portion of the cash consideration in the TowerCo II Holdings LLC acquisition. |
In connection with the issuance of the 5.625% Notes, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with J.P. Morgan Securities LLC, as representative of the Initial Purchasers. Pursuant to the terms of the Registration Rights Agreement, the Company filed and declared effective a registration statement with respect to an offer to exchange the 5.625% Notes for new notes registered under the Securities Act on May 31, 2013. The exchange offer was consummated on July 5, 2013. |