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To: Softechie who wrote (1114)	4/18/2001 2:11:41 AM
From: Softechie	Respond to of 2155

DJ Tower Companies' Bonds Up On Improved Wireless Outlook 17 Apr 15:27 By Tom Barkley Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The bonds of speculative-graded telecommunications tower companies have been buoyed in recent days by analysts' reports suggesting the sector has been unnecessarily sold off by panicky investors. Fears that demand for wireless service is ebbing were alleviated by strong first-quarter numbers by Sprint Corp. (PCS) and Alamosa Holdings Inc. (APCS) last week, which was reassuring for the tower companies that host the wireless networks. Also, the outlook for bondholders of the tower sector is positive because many of the companies have adequate funding levels for continued expansion through the next couple of years, analysts say. "The stocks have been beaten up because the big six (wireless) carriers are facing funding constraints, but it's a win-win situation for the tower guys," said Timothy Finn, tower analyst at J&W Seligman & Co., whose high-yield fund owns several tower names. He said one of the only ways for wireless companies to compete is by getting on more towers to increase coverage, while tower companies enjoy significant cash-flow margins by adding more providers to existing towers. With spreads to Treasurys in the mostly single-B-rated sector widening by as much as 270 basis points in recent weeks, two reports have pinpointed tower names as a good buying opportunity. Bond prices for much of the sector have risen 1-to-2 points this week following reports by Merrill Lynch and Credit Suisse Boston recommending a buy rating on several of the sector's bonds. SpectraSite Holdings Inc. (SITE) 12.5% notes due 2010 have jumped 8 points to 93.5, shaving 100 basis points off its yield spread to 1374 basis points over 10-year Treasurys. "We really view this as a quality sector for the high-yield market," said Bob Kricheff, managing director of high-yield research at Credit Suisse First Boston, who released a report last Thursday recommending buy ratings on three of the five high-yield tower names, including SprectraSite. "There's been a little overreaction and panic in the market," he said. "From a bond perspective, these companies can see worse growth numbers and do well because they have a lot of cash flow." CSFB upgraded its recommendation on the cash-pay bonds of SBA Communications Corp. (SBAC) and SpectraSite to "buy" from "attractive," while maintaining a "buy" rating on Crown Castle International Corp.'s (TWRS) preferred shares and SpectraSite's deferred-pay bonds. The ratings for American Tower Corp. (AMT) and Pinnacle Holdings Inc. (BIGT) were left unchanged at "attractive" and "neutral," respectively. Overweight Sector - Merrill Tuesday, Merrill Lynch added its positive spin on the sector, saying that 2001 and 2002 should be strong years for tower operators and recommending being overweight in the sector. Matt Crakes, vice president and wireless analyst at Merrill Lynch, said some equity analysts' concerns that a slowing economy and equipment vendor warnings would hurt wireless network expansion were unfounded. "There's little evidence that the big six national carriers are decreasing capital expenditures," he said, adding that a Merrill survey of wireless providers found that expenditure forecasts for 2001 were up an average of 13%. "If the capital expenditures are spent, the tower companies will benefit." Merrill reiterated an "overweight" position for Crown Castle's cash-pay and zero-coupon notes, as well as on the preferreds for investors after more return. It also maintained an "overweight" recommendation on SBA's zero-coupon bonds and a "speculative-buy" rating on SpectraSite. American Tower and Pinnacle are unchanged at "neutral." Among other gainers this week, SBA's 10.25% notes due 2009 have climbed to 96 from 93, while American Tower's 9.375% notes due 2009 have bumped up to 97.5 from 96.25. Meanwhile, Crown Castle's notes are up slightly, with the 9.5% notes due 2011 at 98 and the 10.75% notes due 2011 at 104.25. -By Tom Barkley, Dow Jones Newswires; 201-938-4385 tom.barkley@dowjones.com (END) DOW JONES NEWS 04-17-01 03:27 PM