Moody's rates American Towers subordinated debt B3

Moody's Investors Service assigned a B3 rating to the $400 million of 7.25% senior subordinated notes due 2011 recently issued by American Towers Inc., a subsidiary of American Tower Corp.

Moody's also upgraded the secured debt ratings of American Towers Inc. and American Tower LP (co-borrowers) to B1 from B2.

The company's other long-term ratings were confirmed with a stable ratings outlook.

The ratings action affects American Tower Corp.'s $1 billion 9.375% senior notes due 2009, $213 million 6.25% convertible notes due 2009, and $381 million 5% convertible notes due 2010, all confirmed at Caa1. Also affected were the ratings of co-borrowers American Tower LP and American Towers Inc.'s $343 million senior secured revolving credit facility maturing 2007, $397 million senior secured term loan A maturing 2007, and $268 million senior secured term loan B maturing 2007, all upgraded to B1 from B2.

Moody's said the B3 rating on the new 7.25% senior subordinated notes due 2011 reflects their relative standing in the company's capital structure. As obligations of an intermediate holding company, these obligations are effectively subordinated to the secured bank borrowings and other liabilities of the company's operating subsidiaries.

The upgrade to the senior secured credit facilities reflects the much more conservative loan-to-value ratio these secured creditors now enjoy as the company has refinanced a substantial portion of this debt with unsecured debt, Moody's said.

At the beginning of the year, these senior secured obligations totaled over $1.5 billion. Pro forma for the paydown from the net proceeds of the 7.25% senior subordinated notes offering, these secured obligations total less than $750 million, all while benefiting from the same collateral and guarantee package.

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