10.DEBT

The principal values, fair values, and carrying values of debt consist of the following (in thousands):



		As of						As of
		September 30, 2017						December 31, 2016
	Maturity Date	Principal Balance		Fair Value		Carrying Value		Principal Balance		Fair Value		Carrying Value
2014 Senior Notes	July 15, 2022	$	750,000	$	772,500	$	738,547	$	750,000	$	763,125	$	736,992
2016 Senior Notes	Sep. 1, 2024		1,100,000		1,134,375		1,080,674		1,100,000		1,083,500		1,078,954
2012-1C Tower Securities	Dec. 11, 2017		—		—		—		610,000		610,165		607,157
2013-1C Tower Securities	April 10, 2018		425,000		423,959		424,049		425,000		423,381		422,768
2013-2C Tower Securities	April 11, 2023		575,000		586,103		568,339		575,000		563,322		567,545
2013-1D Tower Securities	April 10, 2018		330,000		330,234		329,240		330,000		334,521		328,225
2014-1C Tower Securities	Oct. 8, 2019		920,000		921,168		914,244		920,000		922,199		912,219
2014-2C Tower Securities	Oct. 8, 2024		620,000		623,181		613,253		620,000		608,921		612,641
2015-1C Tower Securities	Oct. 8, 2020		500,000		501,790		492,920		500,000		495,145		491,289
2016-1C Tower Securities	July 9, 2021		700,000		697,081		692,658		700,000		688,072		691,322
2017-1C Tower Securities	April 11, 2022		760,000		759,248		750,645		—		—		—
Revolving Credit Facility	Feb. 5, 2020		430,000		430,000		430,000		390,000		390,000		390,000
2014 Term Loan	Mar. 24, 2021		1,451,250		1,454,878		1,442,529		1,462,500		1,467,984		1,452,039
2015 Term Loan	June 10, 2022		488,750		489,361		481,703		492,500		494,347		484,432
Total debt		$	9,050,000	$	9,123,878	$	8,958,801	$	8,875,000	$	8,844,682	$	8,775,583
Less: current maturities of long-term debt							(773,289)						(627,157)
Total long-term debt, net of current maturities						$	8,185,512					$	8,148,426

The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented:



	For the three months ended September 30,								For the nine months ended September 30,
	2017				2016				2017				2016
	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		Cash		Non-cash
	Interest		Interest		Interest		Interest		Interest		Interest		Interest		Interest

	(in thousands)
5.625% Senior Notes	$	—	$	—	$	7,031	$	—	$	—	$	—	$	21,094		—
5.75% Senior Notes		—		—		5,494		—		—		—		28,494		—
2014 Senior Notes		9,141		182		9,141		173		27,422		540		27,422		513
2016 Senior Notes		13,406		240		6,852		117		40,219		711		6,852		117
2010-2C Tower Securities		—		—		1,098		—		—		—		15,213		—
2012-1C Tower Securities		—		—		4,529		—		5,331		—		13,596		—
2013 Tower Securities		10,804		—		10,804		—		32,413		—		32,413		—
2014 Tower Securities		12,785		—		12,785		—		38,354		—		38,354		—
2015-1C Tower Securities		3,985		—		3,985		—		11,954		—		11,954		—
2016-1C Tower Securities		5,090		—		4,808		—		15,271		—		4,808		—
2017-1C Tower Securities		6,096		—		—		—		11,098		—		—		—
Revolving Credit Facility		2,673		—		667		—		6,848		—		2,245		—
2014 Term Loan		12,964		133		12,209		129		36,291		391		36,453		380
2015 Term Loan		4,366		170		4,111		166		12,221		504		12,275		490
Other		47		—		(88)		—		(7)		—		(260)		—
Total	$	81,357	$	725	$	83,426	$	585	$	237,415	$	2,146	$	250,913	$	1,500

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility is governed by the Senior Credit Agreement. The Revolving Credit Facility consists of a revolving loan under which up to $1.0 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (i) the Eurodollar Rate plus a margin that ranges from 137.5 basis points to 200.0 basis points or (ii) the Base Rate plus a margin that ranges from 37.5 basis points to 100.0 basis points, in each case based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement. In addition, SBA Senior Finance II is required to pay a commitment fee of 0.25% per annum on the amount of unused commitment. If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, February 5, 2020. The proceeds available under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of a period may not be reflective of the total amounts outstanding during such period.

During the three and nine months ended September 30, 2017, the Company borrowed $315.0 million and $415.0 million, respectively, and repaid $35.0 million and $375.0 million, respectively, of the outstanding balance under the Revolving Credit Facility. As of September 30, 2017, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

Subsequent to September 30, 2017, the Company borrowed an additional $30.0 million and repaid $460.0 million of the outstanding balance under the Revolving Credit Facility. As of the date of this filing, no amount was outstanding under the Revolving Credit Facility.

Term Loans under the Senior Credit Agreement

Repricing Amendment to the Senior Credit Agreement

On January 20, 2017, SBA Senior Finance II amended its Senior Credit Agreement, primarily to reduce the stated rate of interest applicable to its senior secured term loans. As amended, the senior secured term loans accrue interest, at SBA Senior Finance II’s election, at either the Base Rate plus 125 basis points (with a zero Base Rate floor) or the Eurodollar Rate plus 225 basis points (with a zero Eurodollar Rate floor).

2014 Term Loan

The 2014 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $1.5 billion that matures on March 24, 2021. Prior to the reduction in the term loan interest rates as discussed above, the 2014 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 150 basis points (with a Base Rate floor of 1.75%) or the Eurodollar Rate plus 250 basis points (with a Eurodollar Rate floor of 0.75%). The 2014 Term Loan was issued at 99.75% of par value. As of September 30, 2017, the 2014 Term Loan was accruing interest at 3.49% per annum. Principal payments on the 2014 Term Loan commenced on September 30, 2014 and are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $3.8 million. SBA Senior Finance II has the ability to prepay any or all amounts under the 2014 Term Loan. The Company incurred deferred financing fees of approximately $14.1 million in relation to this transaction, which are being amortized through the maturity date.

During the three and nine months ended September 30, 2017, the Company repaid $3.8 million and $11.3 million of principal on the 2014 Term Loan. As of September 30, 2017, the 2014 Term Loan had a principal balance of $1,451.3 million.

2015 Term Loan

The 2015 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $500.0 million that matures on June 10, 2022. Prior to the reduction in the term loan interest rates as discussed above, the 2015 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 150 basis points (with a Base Rate floor of 1.75%) or the Eurodollar Rate plus 250 basis points (with a Eurodollar Rate floor of 0.75%). The 2015 Term Loan was issued at 99.0% of par value. As of September 30, 2017, the 2015 Term Loan was accruing interest at 3.49% per annum. Principal payments on the 2015 Term Loan commenced on September 30, 2015 and are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $1.3 million. SBA Senior Finance II has the ability to prepay any or all amounts under the 2015 Term Loan. The Company incurred deferred financing fees of approximately $5.5 million in relation to this transaction, which are being amortized through the maturity date.

During the three and nine months ended September 30, 2017, the Company repaid $1.3 million and $3.8 million of principal on the 2015 Term Loan. As of September 30, 2017, the 2015 Term Loan had a principal balance of $488.8 million.

Secured Tower Revenue Securities

2012-1C Tower Securities

On August 9, 2012, the Company, through a New York common law trust (the “Trust”), issued $610.0 million of Secured Tower Revenue Securities Series 2012-1C (the “2012-1C Tower Securities”), which had an anticipated repayment date of December 11, 2017 and a final maturity date of December 9, 2042. The fixed interest rate of the 2012-1C Tower Securities was 2.933% per annum, payable monthly. The Company incurred deferred financing fees of $14.9 million in relation to this transaction, which were being amortized through the anticipated repayment date of the 2012-1C Tower Securities.

On April 17, 2017, the Company repaid in full the 2012-1C Tower Securities with proceeds from the 2017-1C Tower Securities. In connection with the prepayment, the Company expensed $2.0 million of net deferred financing fees.

The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of those entities that are borrowers on the mortgage loan (the “Borrowers”).

2013 Tower Securities

On April 18, 2013, the Company, through the Trust, issued $425.0 million of 2.240% Secured Tower Revenue Securities Series 2013-1C, which have an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1C Tower Securities”), $575.0 million of 3.722% Secured Tower Revenue Securities Series 2013-2C, which have an anticipated repayment date of April 11, 2023 and a final maturity date of April 9, 2048 (the “2013-2C Tower Securities”), and $330.0 million of 3.598% Secured Tower Revenue Securities Series 2013-1D, which have an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1D Tower Securities”) (collectively the “2013 Tower Securities”). The aggregate $1.33 billion of 2013 Tower Securities have a blended interest rate of 3.218% per annum, payable monthly. The Company incurred deferred financing fees of $25.5 million in relation to this transaction, which are being amortized through the anticipated repayment date of each of the 2013 Tower Securities.

2014 Tower Securities

On October 15, 2014, the Company, through the Trust, issued $920.0 million of 2.898% Secured Tower Revenue Securities Series 2014-1C, which have an anticipated repayment date of October 8, 2019 and a final maturity date of October 11, 2044 (the “2014-1C Tower Securities”) and $620.0 million of 3.869% Secured Tower Revenue Securities Series 2014-2C, which have an anticipated repayment date of October 8, 2024 and a final maturity date of October 8, 2049 (the “2014-2C Tower Securities”) (collectively the “2014 Tower Securities”). The aggregate $1.54 billion of 2014 Tower Securities have a blended interest rate of 3.289% per annum, payable monthly. The Company incurred deferred financing fees of $22.5 million in relation to this transaction, which are being amortized through the anticipated repayment date of each of the 2014 Tower Securities.

2015-1C Tower Securities

On October 14, 2015, the Company, through the Trust, issued $500.0 million of Secured Tower Revenue Securities Series 2015-1C, which have an anticipated repayment date of October 8, 2020 and a final maturity date of October 10, 2045 (the “2015-1C Tower Securities”). The fixed interest rate of the 2015-1C Tower Securities is 3.156% per annum, payable monthly. The Company incurred deferred financing fees of $11.2 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2015-1C Tower Securities.

2016-1C Tower Securities

On July 7, 2016, the Company, through the Trust, issued $700.0 million of Secured Tower Revenue Securities Series 2016-1C, which have an anticipated repayment date of July 9, 2021 and a final maturity date of July 10, 2046 (the “2016-1C Tower Securities”). The fixed interest rate of the 2016-1C Tower Securities is 2.877% per annum, payable monthly. Net proceeds from this offering were used to prepay the full $550.0 million outstanding on the 2010-2C Tower Securities and for general corporate purposes. The Company incurred deferred financing fees of $9.5 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2016-1C Tower Securities.

2017-1C Tower Securities

On April 17, 2017, the Company, through the Trust, issued $760.0 million of Secured Tower Revenue Securities Series 2017-1C, which have an anticipated repayment date of April 11, 2022 and a final maturity date of April 9, 2047 (the “2017-1C Tower Securities”). The fixed interest rate on the 2017-1C Tower Securities is 3.168% per annum, payable monthly. Net proceeds from this offering were used to prepay the entire $610.0 million aggregate principal amount, as well as accrued and unpaid interest, of the 2012-1C Tower Securities and for general corporate purposes. The Company incurred deferred financing fees of $10.2 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2017-1C Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, SBA Guarantor, LLC, a wholly owned subsidiary of the Company, purchased $40.0 million of Secured Tower Revenue Securities Series 2017-1R issued by the Trust, which have an anticipated repayment date of April 11, 2022 and a final maturity date of April 9, 2047 (the “2017-1R Tower Securities”). The fixed interest rate on the 2017-1R Tower Securities is 4.459% per annum, payable monthly. Principal and interest payments made on the 2017-1R Tower Securities eliminate in consolidation.

In connection with the issuance of the 2017-1C Tower Securities, the non-recourse mortgage loan was increased by $800.0 million (or by a net of $190.0 million after giving effect to prepayment of the loan components relating to the 2012-1C Tower Securities). The new loan accrues interest at the same rate as the 2017-1C Tower Securities; however, it is subject to all other material terms of the existing mortgage loan, including collateral and interest rate after the anticipated repayment date.

Debt Covenants

As of September 30, 2017, the Borrowers met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement.

Senior Notes

2014 Senior Notes

On July 1, 2014, the Company issued $750.0 million of unsecured senior notes due July 15, 2022 (the “2014 Senior Notes”). The 2014 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2014 Senior Notes is due semi-annually on January 15 and July 15 of each year. The Company incurred deferred financing fees of $11.6 million in relation to this transaction, which are being amortized through the maturity date.

2016 Senior Notes

On August 15, 2016, the Company issued $1.1 billion of unsecured senior notes due September 1, 2024 (the “2016 Senior Notes”). The 2016 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2016 Senior Notes is due semi-annually on March 1 and September 1 of each year, beginning on March 1, 2017. The Company incurred deferred financing fees of $12.8 million in relation to this transaction, which are being amortized through the maturity date. Net proceeds from this offering and cash on hand were used to redeem $800.0 million, the aggregate principal amount outstanding, of Telecommunications’ 5.75% Senior Notes and $250.0 million of the Company’s 5.625% Senior Notes and pay the associated call premiums.

2017 Senior Notes

On October 13, 2017, the Company issued $750.0 million of unsecured senior notes due October 1, 2022 (the “2017 Senior Notes”). The 2017 Senior Notes accrue interest at a rate of 4.0% per annum. Interest on the 2017 Senior Notes is due semi-annually on April 1 and October 1 of each year, beginning on April 1, 2018. The Company incurred deferred financing fees of $8.2 million in relation to this transaction, which are being amortized through the maturity date. Net proceeds from this offering were used to repay $460.0 million outstanding under the Revolving Credit Facility and for general corporate purposes.