NEW YORK-Standard & Poor’s Ratings Services raised its outlook on American Tower Corp. to positive from stable, and affirmed its “B-” corporate rating on the company.
S&P said it is likely carriers will maintain or increase tower-related spending, and concern over the impact carrier consolidation could have on tower operators has lessened. “With significant capacity required to support the growing use of wireless communications and high costs associated with network reengineering, it seems more likely that merged carriers will mostly maintain their respective networks,” S&P said in a statement.
In addition, S&P said it believes American Tower has strengthened prospects for “meaningfully reducing leverage in the near-to-immediate term.” American’ Tower’s total debt was $3.2 billion as of Sept. 30, 2003, according to S&P. The company’s stock was trading up, at $12.31 per share, following the outlook upgrade.
Meanwhile, S&P earlier this week said its ratings on SBA Communications Corp. were unaffected by the company’s new $350 million senior secured credit facility. “Ratings on SBA communications reflect the company’s aggressive leverage and limited liquidity, which could be an issue in the second half of 2004 given limited free cash flow prospects and significant debt amortization relating to its existing credit facility,” S&P said in a statement. The ratings firm added that if SBA is able to refinance its existing credit facility with the proposed facility, the concern over liquidity “could be significantly assuaged.” Shares of SBA were trading down almost 5 percent at $4.93 mid-day Thursday.
