Debt

9 Months Ended

Sep. 30, 2020

10.DEBT

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



		As of						As of
		September 30, 2020						December 31, 2019
	Maturity Date	Principal ‎Balance		Fair Value		Carrying ‎Value		Principal ‎Balance		Fair Value		Carrying ‎Value
Revolving Credit Facility	Apr. 11, 2023	$	—	$	—	$	—	$	490,000	$	490,000	$	490,000
2018 Term Loan	Apr. 11, 2025		2,346,000		2,281,485		2,330,568		2,364,000		2,369,910		2,346,183
2013-2C Tower Securities ⁽¹⁾	Apr. 11, 2023		575,000		603,802		571,760		575,000		585,954		570,866
2014-2C Tower Securities ⁽¹⁾	Oct. 8, 2024		620,000		675,726		615,896		620,000		644,912		615,205
2015-1C Tower Securities ⁽¹⁾	Oct. 8, 2020		—		—		—		500,000		502,095		498,090
2016-1C Tower Securities ⁽¹⁾	Jul. 9, 2021		—		—		—		700,000		704,095		696,936
2017-1C Tower Securities ⁽¹⁾	Apr. 11, 2022		760,000		778,445		756,632		760,000		763,405		755,061
2018-1C Tower Securities ⁽¹⁾	Mar. 9, 2023		640,000		676,198		635,614		640,000		658,266		634,344
2019-1C Tower Securities ⁽¹⁾	Jan. 12, 2025		1,165,000		1,226,570		1,154,532		1,165,000		1,158,057		1,153,086
2020-1C Tower Securities ⁽¹⁾	Jan. 9, 2026		750,000		756,563		742,505		—		—		—
2020-2C Tower Securities ⁽¹⁾	Jan. 11, 2028		600,000		605,214		593,938		—		—		—
2014 Senior Notes	Jul. 15, 2022		—		—		—		750,000		760,313		743,580
2016 Senior Notes	Sep. 1, 2024		1,100,000		1,124,750		1,088,241		1,100,000		1,142,625		1,086,241
2017 Senior Notes	Oct. 1, 2022		750,000		755,625		746,182		750,000		764,063		744,833
2020 Senior Notes	Feb. 15, 2027		1,500,000		1,515,000		1,480,842		—		—		—
Total debt		$	10,806,000	$	10,999,378	$	10,716,710	$	10,414,000	$	10,543,695	$	10,334,425
Less: current maturities of long-term debt							(24,000)						(522,090)
Total long-term debt, net of current maturities						$	10,692,710					$	9,812,335

(1)The maturity date represents the anticipated repayment date for each issuance.

‎

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



	Interest	For the three months ended September 30,								For the nine months ended September 30,
	Rates as of	2020				2019				2020				2019
	September 30,	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		Cash		Non-cash
	2020	Interest		Interest		Interest		Interest		Interest		Interest		Interest		Interest

		(in thousands)
Revolving Credit Facility	1.347%	$	711	$	—	$	1,009	$	—	$	5,086	$	—	$	5,409	$	—
2018 Term Loan ⁽¹⁾	1.878%		14,536		7,962		26,243		196		57,688		12,014		79,959		572
2013-2C Tower Securities	3.722%		5,396		—		5,396		—		16,188		—		16,188		—
2014 Tower Securities ⁽²⁾	3.869%		6,046		—		11,439		—		18,138		—		37,009		—
2015-1C Tower Securities	3.156%		620		—		3,985		—		8,589		—		11,954		—
2016-1C Tower Securities	2.877%		792		—		5,090		—		10,972		—		15,271		—
2017-1C Tower Securities	3.168%		6,096		—		6,096		—		18,269		—		18,269		—
2018-1C Tower Securities	3.448%		5,570		—		5,570		—		16,711		—		16,711		—
2019-1C Tower Securities	2.836%		8,357		—		1,671		—		25,072		—		1,671		—
2020-1C Tower Securities	1.884%		3,077		—		—		—		3,077		—		—		—
2020-2C Tower Securities	2.328%		3,028		—		—		—		3,028		—		—		—
2014 Senior Notes	4.875%		—		—		9,141		201		3,352		112		27,422		596
2016 Senior Notes	4.875%		13,406		279		13,406		265		40,219		826		40,219		786
2017 Senior Notes	4.000%		7,500		—		7,500		—		22,500		—		22,500		—
2020 Senior Notes	3.875%		14,531		82		—		—		32,238		114		—		—
Other			125		—		21		—		202		—		99		—
Total		$	89,791	$	8,323	$	96,567	$	662	$	281,329	$	13,066	$	292,681	$	1,954

(1) The 2018 Term Loan has a blended rate of 1.878% which includes the impact of the interest rate swap entered into on August 4, 2020 which swapped $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan. Excluding the impact of the interest rate swap, the 2018 Term Loan was accruing interest at 1.900% as of September 30, 2020. Refer to Note 17 for more information on the Company’s interest rate swap.

(2) The 2014-1C Tower Securities, which was repaid September 13, 2019, accrued interest at 2.898%. The 2014-2C Tower Securities accrue interest at 3.869%.

Revolving Credit Facility under the Senior Credit Agreement

During the three months ended September 30, 2020, no amounts were borrowed or repaid under the Revolving Credit Facility. During the nine months ended September 30, 2020, the Company borrowed $515.0 million and repaid $1.0 billion of the outstanding balance under the Revolving Credit Facility. As of September 30, 2020, the Company had no amount outstanding under the $1.25 billion Revolving Credit Facility. In addition, SBA Senior Finance II LLC, the Company’s wholly owned subsidiary (“SBA Senior Finance II”) was required to pay a commitment fee of 0.20% per annum on the amount of the unused commitment. As of September 30, 2020, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

As of the date of this filing, the Company had no amount outstanding under the Revolving Credit Facility.

Term Loan under the Senior Credit Agreement

During the three and nine months ended September 30, 2020, the Company repaid an aggregate of $6.0 million and $18.0 million, respectively, of principal on the 2018 Term Loan. As of September 30, 2020, the 2018 Term Loan had a principal balance of $2.3 billion.

On August 4, 2020, the Company, through its wholly owned subsidiary, SBA Senior Finance II, terminated its existing $1.95 billion cash flow hedge on a portion of its 2018 Term Loan in exchange for a payment of $176.2 million. On the same date, the Company entered into an interest rate swap for $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan. Refer to Note 17 for more information on the Company’s interest rate swaps.

Secured Tower Revenue Securities

As of September 30, 2020, the entities that are borrowers on the mortgage loan (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. The sole asset of the Trust (defined below) consists of a non-recourse mortgage loan made in favor of the Borrowers.

2020 Tower Securities

On July 14, 2020, the Company, through a New York common law trust (the “Trust”), issued $750.0 million of 1.884% Secured Tower Revenue Securities Series 2020-1C which have an anticipated repayment date of January 9, 2026 and a final maturity date of July 11, 2050 (the “2020-1C Tower Securities”) and $600.0 million of 2.328% Secured Tower Revenue Securities Series 2020-2C which have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2C Tower Securities”) (collectively the “2020 Tower Securities”). The aggregate $1.35 billion of 2020 Tower Securities have a blended interest rate of 2.081% and a weighted average life through the anticipated repayment date of 6.4 years. Net proceeds from this offering were used to repay the entire aggregate principal amount of the 2015-1C Tower Securities ($500.0 million) and the 2016-1C Tower Securities ($700.0 million). The remaining net proceeds were used for general corporate purposes. The Company has incurred deferred financing fees of $14.0 million in relation to this transaction which are being amortized through the anticipated repayment date of the 2020 Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $71.1 million of Secured Tower Revenue Securities Series 2020-2R issued by the Trust. These securities have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2R Tower Securities”). The fixed interest rate on the 2020-2R Tower Securities is 4.336% per annum, payable monthly. Principal and interest payments made on the 2020-2R Tower Securities eliminate in consolidation.

Senior Notes

2020 Senior Notes

On February 4, 2020, the Company issued $1.0 billion of unsecured senior notes at par value (the “2020-1 Senior Notes”). On May 26, 2020, the Company issued $500.0 million of additional unsecured senior notes under the same indenture at 99.500% of par value (the “2020-2 Senior Notes”). These notes, collectively the “2020 Senior Notes,” accrue interest at a rate of 3.875% per annum and are due February 15, 2027. Interest on the 2020 Senior Notes is due semi-annually on February 15 and August 15 of each year, beginning on August 15, 2020. The Company incurred financing fees of $18.0 million in relation to these transactions, which are being amortized through the maturity date. Net proceeds from these offerings were used to redeem all of the outstanding principal amount of the 2014 Senior Notes, repay amounts outstanding under the Revolving Credit Facility, and for general corporate purposes. In addition, the Company paid a $9.1 million call premium and expensed $7.7 million for the write-off of the original issue discount and financing fees related to the redemption of the 2014 Senior Notes which are reflected in loss from extinguishment of debt on the Consolidated Statements of Operations.

The 2020 Senior Notes are subject to redemption in whole or in part on or after February 15, 2023 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to February 15, 2023, the Company may, at its option, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes originally issued at a redemption price of 103.875% of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. The Company may redeem the 2020 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: February 15, 2023 at 101.938%, February 15, 2024 at 100.969%, or February 15, 2025 until maturity at 100.000%, of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.