Phoenix Tower International (PTI) has closed a HoldCo financing facility to continue its international expansion. The transaction consists of three tranches at close that may be further increased through an accordion feature up to a total of EUR 775 million (approx. $940 million) to fund future growth. Caisse de dépôt et placement du Québec (CDPQ), a global investment group, and AMP Capital, a global investment manager, provided the financing.
The multi-jurisdiction facility underpins PTI’s focus providing infrastructure assets worldwide. PTI will use facility to fund its recent growth in Europe and provides additional capacity to support growth in existing and new markets, according to information provided by the company.
“This financing provides PTI with the flexibility to continue to grow our business across all markets with incremental financing available at our disposal, and will allow us to deliver for our customers, counterparties and business partners in an expedited manner with a strong lender group,” said Dagan Kasavana, CEO of PTI, in a prepared statement. “CDPQ and AMP Capital’s financing will support PTI as we continue to construct and invest in digital infrastructure across all markets and lead the necessary 4G and 5G build-outs on behalf of our customers and the populations we serve around the world,”.
Thomas Senecal of Blackstone Tactical Opportunities said that PTI’s focus on offering value-add infrastructure solutions to carrier customers is representative of Blackstone’s thematic focus on digital infrastructure and wireless connectivity. “We are proud to partner with CDPQ, a long-term partner to Blackstone, and AMP Capital to support our expansion across the US, Europe, and other growth markets,” he said.
Marc Cormier, executive vice president and head of fixed income at CDPQ, said that the financing in PTI builds on CDPQ’s previous experience to contribute to the expansion of digital infrastructure globally, alongside recognized industry leaders in the fast-growing sector. “By providing a customized and flexible financing solution to PTI, CDPQ is supporting a high-quality operator well positioned to seize opportunities in attractive markets that are experiencing a rising demand for connectivity,” he said.
Patrick Trears, global head of infrastructure debt at AMP Capital, said that PTI is one of the leading global owners and operators of tower infrastructure and that AMP Capital is pleased to have collaborated with PTI and CDPQ to implement a highly bespoke financing to support their growth ambitions.
“With the demand for telecommunication infrastructure set to continue to increase, we believe that PTI is well-placed to assist in meeting this demand and capitalize on associated growth opportunities across their markets,” Trears said. “Telecommunications infrastructure remains a key sector for our infrastructure debt strategy, and with this transaction we are pleased to have added another high-quality investment for our investors around the world.”
PTI was represented by Locke Lord. CDPQ and AMP Capital were represented by Norton Rose Fulbright. Terms of the transaction remain confidential among the parties.
PTI owns and operates over 12,500 towers, 986 km of fiber and markets over 80,000 other wireless infrastructure and related sites located in 16 countries throughout Europe, the United States, Latin America and the Caribbean.
PTI was founded in 2013 with a mission to be a premier site provider to wireless operators across the Americas in high-growth markets. PTI’s investors include funds managed by Blackstone Tactical Opportunities and John Hancock, as well as various members of the management team.
CDPQ invests to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, CDPQ works alongside its partners to build enterprises that drive performance and progress. The company is active in financial markets, private equity, infrastructure, real estate and private debt. As of Dec. 31, 2020, CDPQ’s net assets were CAD $365.5 billion.
AMP Capital is a global investment manager with a heritage and strength in real estate and infrastructure, and experience in fixed income, equities and multi-asset solutions. AMP Capital has been investing in infrastructure since 1988 and has $22 billion infrastructure equity and debt assets under management as of Dec. 31, 2020. AMP Capital has been ranked in the top 10 infrastructure managers globally, based on total capital raised. AMP Capital is owned by AMP Limited, which was established in 1849, and is one of Australia’s largest retail and corporate pension providers.
Source: Phoenix Tower International
In its latest acquisition in South America, Phoenix Tower International has executed a sale and leaseback transaction for 600 wireless towers from Nuevatel, a carrier in Bolivia. Terms of the transaction remained confidential between the parties.
“We are pleased to transact with Nuevatel to purchase these assets and bring the independent tower model to Bolivia,” PTI CEO, Dagan Kasavana, said in prepared text. “We believe our presence in the market will provide carriers with a strong neutral host solution for their growing infrastructure needs. Furthermore, the management team of Trilogy are long term wireless veterans that we are excited to partner with and support in the coming years.”
Choate Hall & Stewart LLP and Harrison & Harrison acted as legal advisors to PTI. Nuevatel was represented in the transaction by Lape Mansfield Nakasian and Gibson, LLC.
PTI also reached an agreement this week with Uniti Group to acquire the ownership rights relating to more than 500 wireless tower sites in Mexico, Colombia and Nicaragua. Terms of the transaction remain confidential between the parties. (see related story)
On the heels of a major court judgement against its key customer Windstream, Uniti Group has sold its Latin American towers to Phoenix Tower International for $100 million in cash. The sale comprised 500 towers located across Mexico, Colombia and Nicaragua. Uniti’s stock, which went down 37 percent yesterday, rose 5.2 percent in early trading but closed down nearly 2 percent today.
Kenny Gunderman, president and CEO of Uniti, said, “This transaction realizes substantial value for our stockholders and allows us to focus on the vast communications infrastructure growth opportunities in the United States. Uniti Towers will continue to be a significant component of our ongoing strategy to provide a full suite of solutions to wireless carriers and other customers.”
The transaction with PTI is subject to customary closing conditions and is expected to close by March 31, 2019. Citi served as exclusive financial advisor to Uniti in connection with this transaction.
The tower sale comes on the heels of a $310 million judgement against Windstream Holdings, one of Uniti Group’s largest customers.
U.S. District Court of the Southern District of New York ruled in favor or Aurelius Capital Management, a hedge fund that had accused Windstream of violating the covenants of its bonds when it sold and leased back its assets to CS&L (now Uniti).
As a result of the judgement, which will be appealed, Aurelius will be awarded $310.5 million.
“This move has not only thrown serious doubt into whether or not Windstream can survive, but has also created real worries for Uniti even as the company continues to diversify away from its former parent,” wrote Daniel Jones, Crude Value Insights.
Wells Fargo Securities focused on the impact of the judgement on Uniti Group, because Windstream’s lease payment represents 69 percent of Uniti’s revenue.
“In our view, [Windstream’s lease payment] clearly will not happen given Friday’s ruling. As of Sept. 30, 2018, [Uniti] had ~$330 million in total liquidity,” wrote Jennifer Fritzsche, Wells Fargo senior analyst. “Recall from our downgrade of the shares in mid-January, based on our math, we did not see a simple path for Uniti to fund its ~$430 million annual dividend from its own internally generated cash flow. This task gets a lot more complicated in the wake of Friday’s ruling.”
Aurelius, which owns a majority of Windstream’s 6.375 percent 2023 Senior Notes, said in a prepared statement, “We take no pleasure in Windstream’s resulting financial predicament. Windstream could easily have averted it – first by not playing fast and loose with its noteholders in 2015, hoping nobody would hold the company to account, and second by settling.”
Uniti Group owns about 600 to 1,000 towers, but it is not a large percentage of its business. Nevertheless, the number of towers would make it a mid-sized tower company if it were purely a tower company.
As part of the sale/lease back, which was completed in 2015, a wholly-owned subsidiary of Windstream contributed telecom assets in exchange for stock in CS&L (now Uniti), $1.035 billion, and $2.5 billion in debt. The deal brought Uniti onto the market as a REIT.
“The objective of this move was to create a tax-advantaged vehicle known as a REIT through which investors could receive preferential tax treatment on earnings so long as those earnings are passed on to shareholders in the form of distributions,” wrote Jones.
Phoenix Tower International (PTI) has expanded its reach into small cells in the United States with the purchase of Syscom Telecom, which manages and markets more than 80,000 sites
for small cell and macro cell deployments with various small cell master agreements in place with wireless operators.
“PTI has been evaluating opportunities to back a small cell focused team in the United States as a way to help our customers with their next generation deployments” stated Dagan Kasavana, CEO of Phoenix Tower International.
PTI is mostly known as a multi-national tower owner, owning or managing more than 5,500 sites in South America, Caribbean, Central America and Mexico. But, recently, PTI has diversified with investments across the Americas, including the acquisition of fiber in Mexico, the DAS investment in Fast Site Solutions in Central America, and the small cell investment in Syscom LatAm in South America.
The key to expanding into other areas, such as small cells, is to find the right team with a differentiated offering, Kasavana said.
“We felt like these 80,000 nontraditional sites [of Syscom Telecom], which might have been seen as too small to hold a macro installation, are the perfect capacity, size and height for small cell installations. That was a way to differentiate our offering and we saw that the Syscom Telecom team over the last few years has major inroads with the carriers,” he said.
With the deployment of 5G in the offing, carriers are developing dense networks of thousands of small cells. An estimated 80 percent of all new sites will be small cells in the near future. Kasavana said the timing is right to get into the small cell space.
Although the carriers have been self-performing to meet their small cell needs, Don Van Splunteren, global vice president of sales, said, they will need third-party help to meet the estimated small cell needs for 5G.
“The carriers are going to need partners that understand not only their roadmap from 4G to 5G but also the complexity that a small cell network brings with it,” he said. “We need to offer them the infrastructure in a plug-and-play way and take the complexity out of the equation.”
An essential component of small cell deployment is using a centralized RAN architecture with a tower as the hub. We continue to believe that small cells built around a tower can leverage the C-RAN architecture for the network needs. Tower are going to be an essential component of ongoing 4G deployment and most assuredly 5G,” Kasavana said.
Phoenix Tower International (PTI) has closed a $200 million senior secured credit facility with Goldman Sachs Specialty Lending Group to continue its growth in the United States.
“This latest refinancing gives us a well-capitalized business plan to continue our growth in the United States with a strong lender group” stated Dagan Kasavana, Chief Executive Officer of Phoenix Tower International. He continued, “We see various opportunities to expand in the United States through traditional macro tower construction and acquisitions as well as through small cell deployments to further help our customers grow their networks to meet consumer demands. This facility will allow us to accomplish both initiatives with dedicated financing in place”.
The credit facility was led by Goldman Sachs Specialty Lending Group. The facility is a landmark transaction for PTI’s continued focus on being a leading provider of infrastructure assets. The credit facility provides financing on PTI’s existing wireless infrastructure, new tower development, and growth of its small cell business.
PTI was represented by Locke Lord. Goldman Sachs Specialty Lending Group was represented by King & Spalding. Terms of the transaction remain confidential between the parties.