| Item 1.01 | Entry into a Material Definitive Agreement. |
Third Amended and Restated Credit Agreement
On January 25, 2024, SBA Senior Finance II LLC (the “Borrower”), a wholly-owned subsidiary of SBA Communications Corporation (“SBAC”), entered into the Third Amended and Restated Credit Agreement (the “Third A&R Credit Agreement”) with (i) SBAC, SBA Telecommunications, LLC, SBA Senior Finance, LLC and the SBAC direct and indirect subsidiaries named therein, as guarantors, (ii) the several lenders from time to time parties thereto, (iii) TD Securities (USA) LLC and Mizuho Bank, Ltd., as the joint lead arrangers, (iv) TD Securities (USA) LLC, Mizuho Bank Ltd., Barclays Bank plc, Citigroup Global Markets Inc., Goldman Sachs Bank USA., JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, as joint book runners, (v) Barclays Bank PLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, as co-documentation agents, (vi) TD Securities (USA) LLC, as sustainability structuring agent and (vii) Toronto Dominion (Texas) LLC, as administrative agent.
The Third A&R Credit Agreement increased the revolving credit commitments under the existing revolving credit facility from $1.5 billion to $1.75 billion aggregate principal amount, which may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. The Third A&R Credit Agreement also extended the maturity date of the revolving credit facility from July 7, 2026 to January 25, 2029 and added provisions relating to integration of Term SOFR as a benchmark interest rate, as well as mechanics in the event of a future benchmark interest rate transition.
Pursuant to the terms of the Third A&R Credit Agreement, amounts borrowed under the revolving credit facility accrue interest, at the Borrower’s election, at either (i) Term SOFR (as defined in the Third A&R Credit Agreement) plus a margin that ranges from 1.125% to 1.500%, (ii) the Eurodollar Rate (as defined in the Third A&R Credit Agreement) plus a margin that ranges from 1.125% to 1.500% or (iii) the Base Rate (as defined in the Third A&R Credit Agreement) plus a margin that ranges from 0.125% to 0.500%, in each case based on the Borrower’s leverage ratio. The Third A&R Credit Agreement retains the sustainability-linked mechanics that were introduced in the 2021 Refinancing Amendment. Specifically, the applicable interest and commitment fee rates are subject to upward or downward adjustments of up to 0.05% based upon the achievement of specified sustainability-linked targets related to tower lighting and renewable energy credits.
The Third A&R Credit Agreement also provided for a new seven-year senior secured term loan in an aggregate principal amount of $2.3 billion (the “Term Loan”). The Company expects to use the proceeds from the Term Loan to refinance the 2018 Term Loan and to pay related fees and expenses. The Term Loan was issued at 99.75% of par value. The Term Loan will mature on January 25, 2031. The Term Loan bears interest, at the Borrower’s election, at either the Base Rate plus 1.0% per annum or Term SOFR plus 2.0% per annum. Principal on the Term Loan will be repaid on the last day of each March, June, September and December, commencing on June 30, 2024, at a rate equal to 0.25% of the initial aggregate principal amount of the Term Loan. The Borrower has the ability to prepay any or all amounts under the Term Loan with no prepayment penalty, except to the extent the Term Loan is prepaid from the proceeds of certain refinancing or repricing transactions within six months of the effective date of the Third A&R Credit Agreement, in which case a prepayment fee equal to 1.0% of the aggregate principal amount of such prepayment will apply.
In addition, the Third A&R Credit Agreement amended the terms of the Second Amended and Restated Credit Agreement, as previously amended (the “Second A&R Credit Agreement”), to, among other things, modify certain definitions, financial ratio calculations and negative covenants in the Third A&R Credit Agreement to reflect the increased size and international scope of the Borrower, including by expanding the scope of Excluded Subsidiaries (as defined in the Third A&R Credit Agreement). All other material terms of the Second A&R Credit Agreement, as amended, remained unchanged.
Third Amended and Restated Guarantee and Collateral Agreement
In connection with the Third A&R Credit Agreement, SBAC and certain of its subsidiaries entered into a Third Amended and Restated Guarantee and Collateral Agreement (the “Second A&R Guarantee and Collateral Agreement”), dated as of January 25, 2024, among SBAC, SBA Telecommunications, LLC, SBA Senior Finance, LLC, SBA Senior Finance II and certain of SBA Senior Finance II’s subsidiaries, as identified in the Third A&R
