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Item 1.01
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Entry into a Material Definitive Agreement.
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Purchase Agreement for 2021 Tower Securities
On April 29, 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., Deutsche Bank Securities Inc. and Mizuho Securities USA 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 $1.165 billion aggregate principal amount of Secured Tower Revenue Securities, Series 2021-1C (the “2021-1C Tower Securities”) to the Initial Purchasers. Upon issuance, the 2021-1C Tower Securities will have an anticipated repayment date in November 2026, a final maturity date in May 2051 and an interest rate of 1.631% 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 $61.4 million principal amount of Secured Tower Revenue Securities, Series 2021-1R (the “2021-1R Tower Securities” and together with the 2021-1C Tower Securities, the “2021 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 2021-1R Tower Securities have an anticipated repayment date in November 2026, a final maturity date in May 2051 and an interest rate of 3.598% per annum.
The Company expects the closing of the offering of the 2021 Tower Securities to occur on or about May 14, 2021. The Company intends to use the net proceeds from the offering to repay the entire aggregate principal amount of the Secured Tower Revenue Securities, Series 2017-1C ($760 million) (the “2017-1C Tower Securities”) and the Secured Tower Revenue Securities, Series 2017-1R ($40 million), 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.
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 Senior Credit Agreement and the various term loans and revolving credit facility under the Senior Credit Agreement, (2) as a book runner and/or as an initial purchaser for our various series of Secured Tower Revenue Securities and (3) as a book runner and/or an initial purchaser for our various series of Senior Notes. Certain of the Initial Purchasers or their affiliates may hold from time to time a portion of the 2017-1C Tower Securities and, accordingly, may receive a portion of the net proceeds of the offering.