Fitch Affirms AP WIP Holdings, LLC Notes Maturing 2019

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following rating on AP WIP Holdings, LLC's notes:

--$102.6 million notes maturing 2019 at 'BBBsf'; Outlook Stable.

KEY RATING DRIVERS

The loan is secured by: perfected first-mortgage liens on the interests of the asset entities in fee assets, ground leased assets, and other sites representing approximately 97% of the issuer net cash flow (NCF) from all such assets; and the equity interests of the issuers and each asset entity, as well as various transaction accounts and agreements. The security interests in the equity of the issuers and the asset entities provide noteholders with the ability to foreclose on the ownership of the issuers and the asset entities in addition to their assets pledged as collateral in the event of default.

As part of its review, Fitch analyzed the site and lease information provided by the master servicer, Midland Loan Services, and the issuer as of July 1, 2016. The issuer annualized NCF has increased to $13.7 million from $12.4 million at issuance attributed to the addition of lease assets during the prefunding period and contractual rent bumps. Fitch's NCF was approximately 4% below the issuer's, implying a Fitch stressed debt service coverage ratio (DSCR) of 1.38x including all potential future prefunding. The debt multiple relative to Fitch's NCF for the loan is 7.64x, which equates to a debt yield of 13.1%.

Total revenue contributed by telephony tenants remained steady, comprising approximately 99.6% of the issuer NCF. Lease revenue from telephony tenants has more stable income characteristics than other technology types due to the strong end-use customer demand for wireless services. AT&T (rated 'A-'/Outlook Stable) and Verizon (rated 'A-'/Outlook Stable), the largest domestic wireless service providers, represent approximately 25.7% of issuer cash flow. The largest state concentration is California at 21.1% of issuer cash flow.

RATING SENSITIVITIES

The Rating Outlook remains Stable. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963

Criteria for Analyzing U.S. Wireless Tower Transactions (pub. 19 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873961

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882401

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

Related Research

AP WIP Holdings, LLC maturing 2019 - Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754056

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1009988

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1009988

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160804006340/en/

Fitch Ratings
Primary Analyst
Jeffrey Diliberto
Director
+1-312-368-3268
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]
Hannah James, +1 646-582-4947
[email protected]

Source: Fitch Ratings

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