American Tower Corporation (AMT), the real estate investment trust (REIT) focused on owning and operating wireless and broadcast communications infrastructure, recently announced the public offering of senior unsecured notes due 2026, 2031 and 2051.
Following the news, shares of the company declined 1.9% to close at $288 in extended trade on Thursday.
The notes due in 2026, 2031 and 2051 have principal amounts of $600 million, $700 million and $500 million, respectively. While the 2026 notes will have an interest rate of 1.45% per annum, the 2031 notes will have an interest rate of 2.3% per annum. Meanwhile, the 2051 notes will be consolidated with the company’s outstanding $550 million 2.95% senior unsecured notes due 2051 issued on November 20, 2020.
The company intends to use the net proceeds from the offering, which is expected to amount to $1,765.1 million, for general corporate purposes and to repay existing debt under its $1 billion unsecured term loan. (See American Tower stock chart on TipRanks)
Recently, Morgan Stanley analyst Simon Flannery reiterated a Hold rating on the stock. The analyst, however, raised the price target to $316 from $270, which implies upside potential of 9.7% from current levels.
According to the analyst, the tower companies are expected to benefit from the onset of 5G connections. Further, the analyst believes that although the tower companies have reached their highest valuations, the absolute multiples are still not that heated up.
The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 8 Buys and 4 Holds. The average American Tower price target of $306.20 implies that the stock has upside potential of 6.3% from current levels.
American Tower scores a 7 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained about 21.9% over the past year.
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