Approximately $6.17 billion of securities affected
New York, February 03, 2011 -- Moody's Investors Service has placed on review for possible upgrade
wireless tower-backed securitizations sponsored by American Tower
Corporation (ATC), Global Tower Partners (AGT), Crown Castle
International Corp (CCI), and SBA communications Corporation (SBA).
The review was prompted by Moody's view that key fundamental credit
risks of cell towers have materially diminished over the last several
years. Specifically, three factors drive this change of view:
lack of disruptive competing wireless technologies, increased barriers
to construction of new towers, and significantly deeper and broader
penetration of wireless communications into everyday life.
Moody's review of the securitizations will include a reassessment
of the value of the towers underlying each transaction and a recalculation
of the cumulative loan-to-value (CLTV) of each tranche in
these transactions. Our rating methodology for wireless tower-backed
securitizations has been revised to reflect our updated view on the sector.
Technology and Re-Leasing Risks Diminished
Moody's believes that investors' exposure to technology and
re-leasing risk in wireless tower securitizations has declined
markedly over the past several years. Competing technologies are
unlikely to materially displace cell towers and stricter zoning rules
and increased public pressure made it more difficult to construct new
towers. As a result, the real estate values of existing towers
are enhanced and the alternatives available to wireless carriers are limited.
Growing Ubiquity of Tower Based Wireless Usage Continues
In the past five years the wireless tower industry has experienced strong
growth, as wireless usage has became woven into the fabric of life
in the U.S., and is expected to continue to grow in
the future. Initially, the growth was mainly driven by the
increase in wireless penetration in the U.S; from less than
70% in 2005 to nearly 90% at the end of 2009 (as noted in
Moody's "Annual Outlook for the Wireless-Telecom Industries
in the U.S. and Canada Smartphones Jump-Start Growth
in 2010-11," published on August 31, 2010).
Recently, the growth was powered by the increase in demand for smart
phones, and the introduction of new wireless devices, mainly
tablets. As a result, current total wireless connections
in the U.S. is about 95% with approximately 290 million
subscribers. In the next few years the enhancement of the carriers'
3G networks and the roll out of 4G networks are expected to generate new
demand for cell towers infrastructure, and in turn support additional
growth in the cell tower industry.
Ratings Rationale
The ratings of wireless tower-backed securitizations are based
on an assessment of the present value of the net cash flow that each tower
pool is anticipated to generate from space licenses (leases) on the towers,
compared to the cumulative debt issued at each rating category.
In deriving the assessed value, we use triangular distributions
for discount rates. When we originally rated the transactions being
placed on review today the distributions were anchored between 10%
and 13% (we typically used 10% minimum, 11%
mean and 13% max). As a result of the diminishment of the
fundamental credit and business risks detailed, Moody's has
lowered the discount rates so that the triangular distributions are now
anchored between 8.5% and 13%, with typical
distribution of 8.5% minimum, 10.0%
mean and 13,0% maximum. Such change will likely increase
Moody's assessed value of each tower pool in the transactions under
review, and therefore reduce the CLTV of each of the tranches.
A lower CLTV may result in higher ratings.
The principal methodology used in these rating was "Moody's Approach to
Rating Wireless Towers-Backed Securitizations: A Path to
Clear Reception in the ABS Market", published in September 2005,
and amended on February 3, 2011 to reflect the change in discount
rates noted above.
In addition, Moody's publishes a weekly summary of structured finance
credit, ratings, and methodologies available to all registered
users of our website at www.moodys.com/SFQuickCheck.
The complete list of affected transactions is as follows:
Issuer: American Tower Trust I
Issue: Commercial Mortgage Pass-Through Certificates,
Series 2007-1
$215,000,000, Class B Certificates, Aa2
(sf) Placed Under Review for Possible Upgrade; previously on May
10, 2007 assigned Aa2 (sf)
$110,000,000, Class C Certificates, A2
(sf) Placed Under Review for Possible Upgrade; previously on May
10, 2007 assigned A2 (sf)
$275,000,000, Class D Certificates, Baa2
(sf) Placed Under Review for Possible Upgrade; previously on May
10, 2007 assigned Baa2 (sf)
$55,000,000, Class E Certificates, Baa3
(sf) Placed Under Review for Possible Upgrade; previously on May
10, 2007 assigned Baa3 (sf)
$73,000,000, Class F Certificates, Baa2
(sf) Placed Under Review for Possible Upgrade; previously on May
10, 2007 assigned Baa3 (sf)
Issuer: GTP Acquisition Partners I, LLC
Issue: Mortgage-Backed Notes, Global Tower Series 2007-1
$45,200,000, Class B Notes, Aa2 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned Aa2 (sf)
$45,200,000, Class C Notes, A2 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned A2 (sf)
$45,200,000, Class D Notes, Baa2 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned Baa2 (sf)
$16,950,000, Class E Notes, Baa3 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned Baa3 (sf)
$56,500,000, Class F Notes, Ba2 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned Ba2 (sf)
$73,450,000, Class F Notes, B2 (sf) Placed
Under Review for Possible Upgrade; previously on May 31, 2007
assigned B2 (sf)
Issuer Entity: GTP Towers Issuer, LLC
Issue: Secured Tower Revenue Notes, Global Tower Series 2010-1
$200,000,000 Class C, A2 (sf) Placed Under Review
for Possible Upgrade; previously on February 19, 2010 assigned
A2 (sf)
$50,000,000 Class F, Ba2 (sf) Placed Under Review
for Possible Upgrade; previously on February 19, 2010 assigned
Ba2 (sf),
Issuer Entity: Crown Castle Towers LLC
$300,000,000 Class C-2015 Fixed Rate Senior
Secured Tower Revenue Notes, Series 2010-1, A2 (sf)
Placed Under Review for Possible Upgrade; previously on Jan 15,
2010 assigned A2 (sf)
$350,000,000 Class C-2017 Fixed Rate Senior
Secured Tower Revenue Notes, Series 2010-2, A2 (sf)
Placed Under Review for Possible Upgrade; previously on Jan 15,
2010 assigned A2 (sf)
$1,250,000,000 Class C-2020 Fixed Rate
Senior Secured Tower Revenue Notes, Series 2010-3,
A2 (sf) Placed Under Review for Possible Upgrade; previously on Jan
15, 2010 assigned A2 (sf)
$250,000,000 Class C-2015 Fixed Rate Senior
Secured Tower Revenue Notes, Series 2010-4, A2 (sf)
Placed Under Review for Possible Upgrade; previously on August 18,
2010 assigned A2 (sf)
$300,000,000 Class C-2017 Fixed Rate Senior
Secured Tower Revenue Notes, Series 2010-5, A2 (sf)
Placed Under Review for Possible Upgrade; previously on August 18,
2010 assigned A2 (sf)
$1,000,000,000 Class C-2020 Fixed Rate
Senior Secured Tower Revenue Notes, Series 2010-6,
A2 (sf) Placed Under Review for Possible Upgrade; previously on August
18, 2010 assigned A2 (sf)
Issuer Entity: Pinnacle Towers Acquisition Holdings LLC (an indirect
wholly owned subsidiary of Crown Castle International Corp)
Issue: Senior Secured Notes, Series 2009-1
$161,857,140 Class A-1, A2 (sf) Placed
Under Review for Possible Upgrade; previously on August 3,
2009 assigned A2 (sf)
$75,000,000 Class A-2, A3 (sf) Placed
Under Review for Possible Upgrade; previously on August 3,
2009 assigned A3 (sf)
Issuer: SBA Tower Trust
$680,000,000, Secured Tower Revenue Securities,
Series 2010-1 Class C, A2 (sf) Placed Under Review for Possible
Upgrade; previously on April 27, 2010 assigned A2 (sf)
$550,000,000, Secured Tower Revenue Securities,
Series 2010-2 Class C, A2 (sf) Placed Under Review for Possible
Upgrade; previously on April 27, 2010 assigned A2 (sf)
New York
Michael McDermitt
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Giyora Eiger
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's places wireless tower-backed securitizations on review for possible upgrade