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COMMUNICATIONS: American Towers At Tightest Levels Vs. Cellnex Since March

COMMUNICATIONS
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  • AMT’s long-end has tightened away the Cellnex curve in the wake of their recent rating upgrade; the two had traded at remarkably similar levels/shapes for months beforehand.
  • With both AMT and Cellnex shifting focus to equity returns, it seems that there isn’t too much scope for further divergence with the expectation that AMT will engage in buybacks now that they are back within their target range (4.8x at H1 vs. 3-5x target) while Cellnex asset disposals are slowing and shifting in focus from delivering with the proceeds (e.g. Poland, Austria).
  • Something to note regarding AMT’s use of proceeds from the Indian disposal is that they could be a potential buyer in Verizon’s rumoured tower sale, which could offset the planned deleveraging with the Indian disposal proceeds and slow any move away from the very top of their target leverage; https://marketnews.com/reports-verizon-baa1-bbb-a-to-sell-towers-ahead-of-amt-baa3-bbb-bbb-lease-lapse.

 

 

 

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  • AMT’s long-end has tightened away the Cellnex curve in the wake of their recent rating upgrade; the two had traded at remarkably similar levels/shapes for months beforehand.
  • With both AMT and Cellnex shifting focus to equity returns, it seems that there isn’t too much scope for further divergence with the expectation that AMT will engage in buybacks now that they are back within their target range (4.8x at H1 vs. 3-5x target) while Cellnex asset disposals are slowing and shifting in focus from delivering with the proceeds (e.g. Poland, Austria).
  • Something to note regarding AMT’s use of proceeds from the Indian disposal is that they could be a potential buyer in Verizon’s rumoured tower sale, which could offset the planned deleveraging with the Indian disposal proceeds and slow any move away from the very top of their target leverage; https://marketnews.com/reports-verizon-baa1-bbb-a-to-sell-towers-ahead-of-amt-baa3-bbb-bbb-lease-lapse.