Top of the tower
The €1.2bn loan for Blackstone-backed global wireless infrastructure group Phoenix Tower International was the stand-out loan of 2023, a complex multi-jurisdictional transaction which garnered strong support from the infrastructure bank and institutional market despite inherent complexities and choppy market conditions.
The seven-year financing, for PTI’s Spanish subsidiary PTI Iberica V, included a €700m term loan and a €400m delayed draw term loan, providing flexible access to dry powder for acquisitions. There was also a €50m revolving credit facility and a €50m debt service reserve facility.
Proceeds consolidated the existing debt financing of PTI’s European platform spanning Italy, Ireland, Malta, Cyprus and France with significant structuring work undertaken across the five jurisdictions to combine PTI’s existing European loans in the most tax-efficient manner.
It also provided funding for capital expenditure and acquisitions, including the acquisition of a French portfolio of wireless tower assets from Cellnex, and financed working capital requirements.
“This was much more than a dollar-for-dollar refinancing transaction,” said Saarvin Balasundram, a principal in the capital markets unit at Blackstone Group. “The key strategic rationale was to unlock more leverage and improve pricing so that the company can be more nimble for future opportunistic acquisitions.”
By consolidating loans into a single financing, debt incurrence thresholds could be set higher, reflecting the diversification benefits over the previous single jurisdiction asset structure and helping to unlock leverage of 9–9.5 times, up from the 6–6.5 times seen on a typical tower financing.
PTI also benefited from better pricing, with the term loans pricing at 325bp over Euribor, down from the blended 350bp paid previously.
"By providing a flexible financing covering multiple jurisdictions, PTI was able to simplify its capital structure, reduce pricing and access incremental funds to support future growth,” said Michael Bremer, CFO of PTI.
With the increased funding requirement, the financing had a staged execution rather than a rollover of existing commitments, bringing in new banks on top of existing relationship lenders and capital from funds.
Natixis and Deutsche Bank were lead bookrunners and mandated lead arrangers with ABN AMRO, ING and Scotiabank brought in as bookrunners and MLAs ahead of launch. BNP Paribas and MUFG were MLAs, while Citigroup, Mizuho Bank and Toronto-Dominion were participants. ING was also appointed as sustainability coordinator with sustainability to be implemented later as part of the company’s broader ESG strategy.
The financing came on the heels of a similar US$2bn refinancing completed for PTI’s US and Latin American businesses in 2022. The two businesses are strategically ringfenced from each other to maximise pools of capital at cheaper cost.
PTI owns and operates over 24,000 telecoms towers in 24 countries throughout Europe, the US, Latin America and the Caribbean.
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