From Telecom Finance 
by Lorna Thornber

21 June 2016

US mobile tower leasing company Vertical Bridge has closed a US$321m asset-backed securities offering and a US$400m senior credit facility to help expand its real estate portfolio.

The Florida-based company’s debut ABS issuance, led by Deutsche Bank Securities and Barclays, consists of three tranches: a US$240m tranche, which Fitch and Moody’s have rated A and A2 respectively; a US$29m tranche rated BBB by Fitch; and a US$52m tranche rated BB- by Fitch.

The securities, sold at par, have a five-year anticipated repayment date with a 30-year final maturity and a blended fixed interest rate of 3.81%.

They are secured by mortgages on certain tower sites, a security interest in the towers and tenant leases associated with the sites, first priority-perfected security interest in the personal property associated with all non-mortgaged sites, and a pledge of the equity interest of the asset entity holding the tower sites.

The new US$400m credit facility, completed simultaneously, was led by TD Securities, with Barclays, CIT Bank, Deutsche Bank, JP Morgan Chase Bank and SunTrust Robinson Humphrey as joint lead arrangers and bookrunners. It has a five-year term, maturing in June 2021, and is secured by mortgages on certain tower sites as well as a security interest in the towers and related leases.

The company, the flagship US tower REIT of Digital Bridge Holdings, has also paid off an existing senior credit facility.

TelecomFinance understands that two of Digital Bridge Holdings’ other investment companies – Andean Tower Partners (ATP) and Data Bridge – have financing transactions in the works.

Vertical Bridge co-founder and CEO Alex Gellman said the company is “extremely pleased” with the investor response to the ABS issuance.

“This securitisation puts in place long-term funding that matches to the long-term nature of our cash flows,” he said. “The strong investor interest and the pricing speak to the quality and value of our assets.”

He added that the new credit facility will allow the company to continue buy and develop attractive sites across the US.

Vertical Bridge describes itself as the largest private owner and manager of wireless communication infrastructure in the US with some 45,000 tower, rooftop, billboard, utility attachment and other site locations. It was founded in 2014 by executives from Digital Bridge Holdings and former senior officers of Global Tower Partners (GTP), which was bought by American Tower for US$4.8bn in October 2013. Vertical Bridge plans to continue GTP’s investment thesis. Fitch noted that GTP issued US$2bn worth of securitisation notes between 2007 and 2013.