Vertical Bridge REIT, LLC yesterday announced it successfully issued $534 million of Secured Tower Revenue Notes in a private asset-backed securitization (ABS) transaction. This marks the first securitization of a non-traditional or esoteric asset since the ABS market shut down due to the COVID-19 pandemic.
“During the COVID-19 pandemic, wireless traffic has surged with U.S. carriers reporting a nearly 25 percent increase in traffic at times. As we approach 5G, traffic levels will only continue to rise, and the only way to meet this demand is to invest in communications infrastructure,” said Vertical Bridge CEO Alex Gellman. “Towers have a number of elements that make them a particularly compelling segment of the sector, and the success of this offering underscores their appeal, as well as the overall growth and durability of the industry, even in economically challenging times.”
The Revenue Notes are collateralized by nearly 2,800 geographically diverse sites across 49 states and Puerto Rico and are strategically positioned in urban, suburban, key corridor and rural markets. This is the company’s fifth successful securitization since its founding in 2014, as well as its largest to-date. The transaction includes a refinancing of $321 million in commercial mortgage-backed securities from the Company’s first securitization, which was completed in June 2016. It also includes the first-ever Variable Funding Note (VFN) in a wireless tower transaction, which was issued at $60 million. Excess proceeds from the securitization and VFN will be used to fuel Vertical Bridge’s continued growth, including building and acquiring new towers across the United States and its territories.
The company says the transaction showcases a strong and growing interest in the tower sector from the investor community and highlights Vertical Bridge’s deep relationships across the ABS market. It also demonstrates the continuing evolution of communications infrastructure investment as several new investors chose to deploy capital in the tower sector for the first time with this securitization.
“This securitization speaks to the strength of our assets, and we are extremely gratified by the reception that the offering has received from both returning investors and newcomers to the sector,” added Vertical Bridge CFO Michael Romaniw. “The U.S. wireless market combines stability with growth, and as a U.S.-focused, pure-play tower company, we’ve placed ourselves at the very peak of one of the most attractive investment markets there is. In many ways, this is our most successful securitization to date.”