| Item 1.01 | Entry into a Material Definitive Agreement. |
Purchase Agreement for 2021-2 and 2021-3 Tower Securities
On October 8, 2021, SBA Senior Finance, LLC (“SBA Senior Finance”), an indirect subsidiary of SBA Communications Corporation (the “Company”), entered into a Purchase Agreement (the “Purchase Agreement”) among SBA Senior Finance, Deutsche Bank Trust Company Americas, as trustee (the “Trustee”), and Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers named on Schedule I thereto (the “Initial Purchasers”), pursuant to which SBA Tower Trust (the “Trust”), a New York common law trust established by SBA Depositor LLC, an indirect subsidiary of the Company (“SBA Depositor”), agreed to sell $1.79 billion aggregate principal amount of Secured Tower Revenue Securities, consisting of $895.0 million aggregate principal amount of Series 2021-2C (the “2021-2C Tower Securities”) and $895.0 million aggregate principal amount of Series 2021-3C (the “2021-3C Tower Securities”), to the Initial Purchasers. Upon issuance, (1) the 2021-2C Tower Securities will have an anticipated repayment date in April 2027, a final maturity date in October 2051 and an interest rate of 1.840% per annum and (2) the 2021-3C Tower Securities will have an anticipated repayment date in October 2031, a final maturity date in October 2056 and an interest rate of 2.593% per annum.
To satisfy the applicable risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Risk Retention Rules”), SBA Guarantor, an affiliate of SBA Depositor (“SBA Guarantor”) also agreed to purchase $94.3 million principal amount of Secured Tower Revenue Securities, Series 2021-3R (the “2021-3R Tower Securities” and together with the 2021-2C Tower Securities and the 2021-3C Tower Securities, the “Tower Securities”) in order to retain an “eligible horizontal residual interest” (as defined in the Risk Retention Rules) in an amount equal to at least 5% of the fair value of the offered and retained securities. The 2021-3R Tower Securities have an anticipated repayment date in October 2031, a final maturity date in October 2056 and an interest rate of 4.090% per annum.
The Company expects the closing of the offering of the Tower Securities to occur on or about October 27, 2021. The Company intends to use the net proceeds from the offering to repay, to the extent not earlier repaid, the entire $575.0 million aggregate principal amount of the Secured Tower Revenue Securities, Series 2013-2C (the “2013-2C Tower Securities”), as well as accrued and unpaid interest, and to make a cash distribution to SBA Guarantor, which will further distribute such amount to one or more other Company entities to be used for general corporate purposes, which may include repaying outstanding indebtedness.
Relationships
The Company and certain of its affiliates have previously entered into commercial financial arrangements with each of the Initial Purchasers, and/or their respective affiliates, and each of these entities and/or its affiliates has in the past provided financial, advisory, investment banking and other services to the Company and its affiliates, including serving (1) as a lender and/or in other related capacities in connection with the Company’s Senior Credit Agreement and the term loans and revolving credit facility under the Senior Credit Agreement, (2) as a book runner and/or as an initial purchaser for the Company’s various series of Secured Tower Revenue Securities and (3) as a book runner and/or an initial purchaser for the Company’s various series of Senior Notes. Certain of the Initial Purchasers or their affiliates may hold from time to time a portion of the 2013-2C Tower Securities and, accordingly, may receive a portion of the net proceeds of the offering.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 is incorporated by reference herein.
On October 8, 2021, the Company delivered a redemption notice with respect to all $1.1 billion of its outstanding 4.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes will be redeemed on November 8, 2021.
