Phoenix Tower International

Summary for Investors: IDF V

April 2021

CONFIDENTIAL
Investment Summary: Phoenix Tower International

Executive Summary
We are pleased to advise that the AMP Capital Infrastructure Debt Team, on behalf of the Infrastructure Debt Fund V (“IDF
V”), have originated and closed an investment of €225.0m (c. US$265.8m equivalent ) in a €450.0m HoldCo facility (the
“HoldCo Facility”) secured against Phoenix Tower International (the “Company” or “PTI”), one of the leading global owners
and operators of passive telecommunication tower infrastructure. The HoldCo Facility was signed on the 22nd April 2021.

PTI’s business model is focused on the ownership and operation of high-quality wireless infrastructure sites in markets
experiencing strong wireless usage growth around the world. PTI owns towers, rooftops, billboards and other site locations,
and leases them to a client base that is predominantly made up of major multinational telecommunications carriers. The
tenants mount their own equipment on PTI’s towers and PTI generates revenues through medium- and long-term lease
agreements ranging from 5-20 years. On a TCF weighted basis, PTI’s existing leases have a c. 8 year remaining average
life, and typically feature annual fixed or CPI linked escalators.

PTI’s current tower portfolio is made up of c. 12,000 tower assets across 17 countries. It benefits from a diversified book
of over 75 global telecommunications customers and is generating annual revenues of c. $292m and run rate tower cash
flow (“TCF”) of c. $192m as at 31 December 2020. It is currently owned by a highly experienced and supportive sponsor
group, consisting of Blackstone and John Hancock.

The HoldCo Facility has been structured as a €450m Delayed Draw Term Facility and will be utilised primarily by PTI to
part-fund TCF accretive acquisitions or investments into new tower infrastructure across their portfolio. Draws under the
Delayed Draw Term Facilities shall be sized up to a Permitted Leverage Ratio, set at 8.0x TCF from Latin America & the
Caribbean, and 12.0x TCF from Europe & the US. The Facility will be issued in three multi-currency tranches that will be
available to be drawn in either Euros or US Dollars, and will benefit from cross-collateralisation across the full PTI group.

The HoldCo Facility has been priced at Libor + 6.75% (1.00% Libor Floor) on any US Dollar drawdowns, with any Euro
drawdowns accruing interest at Euribor + 6.75% (0.00% Euribor Floor). The Facility has a 6-year tenor, will pay a 2.00%
arrangement fee at close on all committed amounts and a 1.00% per annum commitment fee on any amounts committed
but as yet undrawn. PTI have the ability to elect to PIK up to 100% of the interest payable under the HoldCo Facility in
any interest period, subject to the application of a 75bp increase in margin for any periods the PIK is utilized. The
Investment Team currently forecast PTI will opt to cash pay c. 50% or more of the HoldCo Facility initially, with the cash
pay component increasing over time as PTI refinance a number of existing senior facilities that are currently structured to
restrict dividends to the holding company.

PTI has drawn €186.2m at close (IDV allocation: €93.1m) to fund transaction costs and to part fund the acquisition of
Towertel, a leading independent TowerCo in Italy. Subsequent drawdowns will be utilised to fund further TCF accretive
acquisitions or investments and, once the HoldCo Facility commitments have been fully utilised, the Investment Team have
negotiated a right of first refusal over a €325m uncommitted accordion facility.

This transaction offers IDF V an excellent opportunity to invest in a market leading private tower company, whose business
model is underpinned by: a diverse portfolio of essential infrastructure assets; long-term contracts with creditworthy
telephony clients; high barriers to entry; and a global portfolio that offers significant diversification.

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 Phoenix Tower International
Summary for Investors: IDF V
April 2021

CONFIDENTIAL
HoldCo Facility: Summary of Terms
Key Terms

Borrower(s) US Borrower: Phoenix Tower International Global 2 LLC

Italy Borrower: Phoenix Tower Italy HoldCo S.p.A.

Quantum Total Facility Size: €450m, consisting of three tranches:

Tranche A: €125m Term Loan Facility (Availability Period: 60 days from close)
Tranche B: €150m Delayed Draw Facility (Availability Period: 9 months from close)
Tranche C: €175m Delayed Draw Facility (Availability Period: 24 months from close)

Initial Permitted 8.9x TCF

Leverage Draws under the Delayed Draw Facilities shall be sized up to a Permitted Leverage Ratio, set at i) 8.0x TCF (Latin
America & the Caribbean), and ii) 12.0x TCF (Europe & the US).

Purpose Tranche A: to part-fund the acquisition of a majority stake in TowerTel

Tranche B & C: to fund Qualified Investments

Tenor 6 years

Arrangement fee 2.00%, payable at signing

Commitment Fee 1.00% per annum

Interest Rate EUR Amounts: Euribor + 6.75% (Euribor Floor at 0.00%)

USD Amounts: L + 6.75% (Libor Floor at 1.00%)

Payment In Kind Up to 100% permitted during any quarterly interest period.

The proportion of the facility capitalised in each quarter accrues interest at additional 75 bps for that quarter and is
then treated as principal thereafter.

Repayment Bullet at maturity

Cash Sweep After the fourth anniversary of close: 100% to a Target Consolidated Leverage Ratio set at 1.50x below the then
applicable Permitted Leverage Ratio.

Prepayment Tranche A, B & Tranche C amounts (drawn before the first anniversary of close): Make Whole for 3 years from close
Protection Tranche C amounts (drawn following the first anniversary of close): Make Whole for 4 years from close
Change of Control Make Whole, applies in the event a Change of Control event occurs during the last 24 months
of the applicable Make Whole Period:
Tranche A, B & C (drawn before the first anniversary of close): Make Whole through 2 years from close, plus 1.00%
Tranche C (drawn following the first anniversary of close): Make Whole through 3 years from close, plus 1.00%

Transaction Security Shared security package to include a share pledge at both the US & Italy Borrowers, in addition to negative pledges
and guarantees from all entities below not encumbered to senior debt.

Ranking First ranking at HoldCo and structurally and contractually subordinated to the Senior Debt

Financial Covenants Lock-Up Ratios and Default Ratios set based on i) Total Group ADSCR and ii) Total Leverage Ratio

Incremental Facilities Right of first refusal on a €325m uncommitted incremental facility, that is available to be implemented by way of an
increase in Tranche C commitments on the same terms & conditions as the initial commitments. The Initial Lenders
are to maintain Majority Lender status provided they collectively maintain €275m in aggregate.

Governing Law and New York Law

Jurisdiction

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 Phoenix Tower International
Summary for Investors: IDF V
April 2021

CONFIDENTIAL
Market & Business Description
Phoenix Tower International
Founded in 2013, PTI is focused on owning and operating high quality wireless infrastructure sites in markets experiencing
strong wireless usage growth around the world. PTI is a top-tier player in the space, and the only private tower company
with significant operations in all of the United States, Europe, Latin America, and the Caribbean.

PTI has developed this portfolio by targeting high quality tower assets in stable jurisdictions that are expected to experience
strong wireless usage growth driven by underlying digitalisation trends. A key element of their strategy has been the
development of strong carrier relationships and this has enabled PTI to secure 19 sale & leaseback transactions to date
across 8 countries, and 11 active build to suit programmes across 10 jurisdictions. Looking forward, in addition to further
inorganic growth opportunities, their build to suit pipeline provides scope for significant TCF growth in markets PTI have
already established a presence in.

Between 2013 – 2019 PTI’s strategy had a predominant geographic focus on Latin America, the Caribbean, and the US.
This has recently been expanded to include Europe as PTI have identified a significant short to medium term pipeline of
tower divestments across the continent. This is expected to be driven by a requirement for MNOs to seek to monetise
their passive infrastructure to de-lever and finance investments into new 5G technology & associated network upgrades.
PTI successfully concluded two transactions in Europe during 2020 (in France and Ireland), and will close the acquisition
of 82% of TowerTel in Italy in late April. PTI also signed the purchase agreements for tower portfolios in Malta and Cyprus
on March 5th, 2021 that a fully contracted under 20-year agreements with Monaco Telecom.
The current annual contribution to TCF by jurisdiction, as at December 2020, is outlined in the table below:

US,
12.5%

Latin America &

the Caribbean
(Non- OECD), Europe
46.9% (including
TowerTel),
27.5%

Latin America &

the Caribbean
(OECD), 13.0%

PTI’s tower activities across Latin America & the Caribbean currently contribute c. 60% of PTI’s total annual tower cash
flow. These cashflows are generated from a broad range of jurisdictions, and the majority of the Latin America tower cash
flow (c. 80%) is expected to be either generated in investment grade rated economies, or from portfolios of towers whose
revenues are underpinned by counterparties that are either investment grade rated, or are large multinational carriers (such
as Altice, Sprint & Millicom).

Key Markets
United States (13% FY2020 Tower Cash Flow)

The outlook for the US tower industry remains highly positive. Although the entrenched players are facing some new
competition (from companies like PTI), the overall scale of their existing portfolios and stable, long-term contracts enhanced
by high switching costs suggest that though they may lose a small amount of overall market share, the overall market will
continue growing in such a way to support existing players and new entrants.

Four main players dominate the market: Crown Castle, SBA Communications, American Towers and Vertical Bridge. New
tower development has traditionally been the realm of local developers who develop small portfolios of towers (1-5) and
sell them on to one of the four large players. Over the past several years, several companies have started up to develop
new build opportunities at a larger scale. This has been driven by large-scale build orders offered by the four large U.S.
telcos who are hoping to counteract the influence of the large tower companies. On the colocation side, all the companies
listed above will offer competition, especially for new “entrants” into the leasing space looking to quickly build out large or
nationwide networks.

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 Phoenix Tower International
Summary for Investors: IDF V
April 2021

CONFIDENTIAL

Italy (17% FY2020 Tower Cash Flow)

The Italian mobile market has a high penetration rate (132% in 2019) but is expected to decline to 109% by 2025, due to
the shift from multi-SIM to single-sim contracts. While 4G has been slower in taking off, due primarily to late spectrum
availability, Italian MNOs have already started commercializing 5G. Data usage has been growing steadily and is expected
to further grow at a 36% p.a. pace until 2025. The Italian mobile market is currently served by four main mobile network
operators: TIM and Vodafone (with a stable 29% market share each), Wind-Tre (26% market share) and Iliad (7% market
share). Mobile Virtual Network Operators (MVNOs) represent the remaining 9% of the market share. MNO ARPUs
stabilized in recent years driven by pricing strategies such as segmentation. In 2018, TIM and Vodafone came away from
the 5G auction with the largest blocks of immediately available spectrum indicating they will lead 5G rollout. Fixed Wireless
Access (FWA) based on 4G is already extensively used in Italy (+15.2% CAGR 2015-20), mainly provided by the two
largest players Linkem and Eolo.

Dominican Republic (17% of FY2020 Tower Cash Flow)

The country’s mobile requirements are currently met by three mobile network operators: Claro, Altice, and Viva. Whilst
the country is currently characterised as having lower mobile penetration levels than the rest of the region, 4G subscribers
have tripled over the past three years, and subscriber growth is expected to continue to grow steadily over the short –
medium term.
The mobile market has historically been operated as an effective duopoly, with Claro as the market leader maintaining a
larger market share than both Altice and Viva combined. Nationwide 4G coverage is currently provided by Claro and Altice
and both entities have made public their intention to invest further, in particular in relation to the upcoming 5G spectrum
auctions planned for H2 2021. The government have made clear their aim is to be the first country in the region to roll out
5G, and it is believed this process could potentially attract an MNO new entrant to the market. These developments, along
with the requirements for existing MNOs to continue to expand and densify their networks, are expected to drive new tower
deployment and colocation growth over the short – medium term. Solon forecast that, by 2026, the total number of macro
sites will increase to 8.0k (from 5.2k in 2020), with tenancy growth increasing from 1.6x to 2.08x.

Tenant Overview
As of December 2020, PTI’s consolidated portfolio consisted of 11,975 tenant-occupied tower sites leased to ~17,968
individual tenants with an average tenancy ratio of 1.5x tenants per tower. PTI’s top 10 tenants - all of which are mobile
network operators - comprised of ~78% of 2020 TCF. They have a weighted average credit rating of BBB / Baa2. The
portfolio features limited customer or geographic concentration with ~60% of total 2020 TCF generated from investment-
grade countries and 53% from OECD countries. Over 80% of the tenant leases have a weighted contract length of over
10 years. Below presents a summary of the top 10 tenants with Telefonica (BBB-) being the largest tenant.

It is helpful to note that all of PTI’s key tenants own or license their spectrum. This provides financial stability as, in the
unlikely event of a potential default in any specific market, the spectrum would still be required to provide essential cell
services.

Technology Total Revenue Credit Rating

Counterparty Total TCF % of Total TCF
Type (in USD m) (S&P / Moody’s)

Telefonica 39.7 20.7% MNO 53,175 BBB- Stable / Baa3

Altice 20.7 10.8% MNO 18,104 B Negative / NR

Trilogy 15.7 8.2% MNO 659 B- Stable / Caa1

Digicel 14.6 7.6% MNO 2,300 WR / Caa1 Negative

Eir 14.2 7.4% MNO 1,437 B+ Positive / B1

CK Hutchinson /
12.1 6.3% MNO 50,082 A Stable / A2
WindTre
T-Mobile 11.7 6.1% MNO 68,397 BB Stable / NR

AT&T 10.8 5.6% MNO 171,760 BBB Stable / Baa2

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 Phoenix Tower International
Summary for Investors: IDF V
April 2021

CONFIDENTIAL
America Movil 9.6 5.0% MNO 48,508 BBB+ / A3

Total 2020 TCF 192.0 77.7%

Weighted Credit Rating Baa2

Financial Summary
Capital Structure at Financial Close
The table below provides an overview of the consolidated capital structure of the PTI portfolio at Financial Close, based
on TCF as at March 2021:

At Financial Close, the capital structure is expected to consist of ~$1.40bn (USD equivalent) in senior debt across the
various jurisdictions PTI operates in (corresponding to 7.0x TCF), as well as $331m (USD equivalent) in HoldCo debt (1.7x
TCF). Tranche A & Tranche B (together $331m (USD equivalent)) are expected to be drawn in the near-term to part-fund
acquisitions during their respective availability periods – For the purpose of this analysis, it is assumed that they are drawn
at Financial Close. The senior and total leverage at Financial Close are therefore expected to be 7.0x TCF and 8.7x TCF
respectively. The maximum Permitted Leverage is expected to be 9.7x with the current pro forma geographic mix.
Based on recent comparable transactions, US tower portfolios have typically traded at c.22-26x TCF, European tower
portfolios at c.18-26x TCF, and Latam tower portfolios at 15-18x. Applying a multiple towards the lower end of each
valuation range (22x for US towers, 19x for European towers and 16x for Latam towers) to the PTI portfolio’s geographic
composition in terms of TCF results in a 17.6x valuation for the PTI portfolio. This implies a 50.6% equity cushion at
Financial Close.

Financial Performance
PTI has been established over the past 8 years primarily through M&A growth. The company also has an active build-to-
suit programs in certain key markets. The below table provides an overview of PTI portfolio growth and associated historical
financials on an annualized run-rate basis:

PTI is currently present in 17 different markets with a total of 11,975 sites (as of December 2020). PTI has a disciplined
capital deployment strategy, targeting a portfolio comprising 40% of assets in the US & Europe and 60% in Latin America,
with at least 75% of revenue from investment-grade and/or large multinationals and a USD / EUR currency above 70% of
total revenue, as well as a target revenue coming from telephony above 90% of total revenue. As of January 2021, 81%
of TCF are in USD & EUR. The company plans to grow through investments in BTS programmes and further acquisitions
and by focusing on driving incremental lease revenue to existing towers sites through additional lease up. PTI’s portfolio
demonstrated a strong 2020 Annualized run-rate TCF & EBITDA margin of 66% and 49% respectively.
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 Phoenix Tower International
Summary for Investors: IDF V
April 2021

CONFIDENTIAL
Investment Rationale
Physical Infrastructure Providing Essential Digital Services
• Cell and broadcast towers serve as mission-critical infrastructure to the mobile telephone, data, and broadcast
sectors – all key components to the modern economy. Existing towers are highly defensive assets, as they are
difficult to permit and moving existing equipment requires high switching costs for clients. PTI is one of the leading
operators in the global tower market, and their towers benefit from strategic positions within their constituent
markets and a relatively young average age (c.12 years vs typical asset life of 50 + years).

• The majority of the tenants on PTI’s tower portfolio are telephony clients, an industry buoyed by tailwinds of ever-
increasing coverage requirements and network densification driven by the move towards 4G, 5G and rapidly
increasing mobile data consumption. PTI’s portfolio has approximately 1.5 tenants per site, allowing significant
scope for further growth. Rent from additional tenants added to existing towers flows has a positive impact on
profitability as it flows almost directly to the bottom line.

Strong Barriers to Entry

• PTI owns and operates a highly diversified portfolio of 11,975 high quality, tenant occupied, tower sites across
the US, Europe, Latin America & the Caribbean, with a very diverse collection of tenant leases – their top 10
tenants account for 78% of TCFs, with no single tenant accounting for more than 20% of TCFs.

• PTI’s portfolio has been developed since inception in 2013 through a series of tower acquisitions, sale and
leaseback and build to suit agreements across 17 countries. The towers themselves are highly defensive assets
as each has undergone an extensive permitting process through the development phase. As a result, it typically
not feasible to build a new competing tower in a similar location, and carriers that do not have a presence in a
particular area typically find it more economical to co-locate if there is an existing tower already there.

Revenues Underpinned by Long-Term Contracts

• PTI’s portfolio benefits from long-term contracted revenue streams with a diverse group of high-quality tenants.
The existing contracts in PTI’s portfolio have a weighted remaining average life of c. 8 years. Due to the demand
for increased cellular coverage, network densification, and high switching costs, historical renewal rates across
the industry for these contracts is ~98%; PTI has experienced c. 0.75% p.a. churn historically across its portfolio.

• Secular trends point to increasing needs for cell tower infrastructure. Existing contracts have fixed or CPI annual
escalators, which will be expected to contribute towards a continued improvement in TCF going forward.

Global Diversification with Majority of Cashflow Originating in OECD

• PTI’s tower portfolio provides an essential service to a diverse selection of markets. In 2021, no single country is
forecasted to contribute more than 17% of TCF. This diversification assists in mitigating PTI’s overall exposure at
a group level to country specific risks.

• All of the telecommunications markets that PTI are active in are forecast to experience similar secular trends that
point to an increasing requirement for cell tower infrastructure. That said, the Towerco markets within the PTI
portfolio are currently at quite different stages. Whilst North America is the most mature of the Towerco markets,
there are expected to be significant growth opportunities in Latin America through colocation, and Europe through
increasing MNO tower divestments. This combination of the more mature US & European telecommunications
markets, with the more nascent Latin America markets is expected to provide a further diversifying effect.

• PTI remains mainly exposed to OECD countries - PTI are incorporated and have headquarters in the US (Boca
Raton, Florida), have 54% of their tower sites in OECD economies, generate 55% of their group revenue in OECD
economies, and are owned by US based sponsors (Blackstone and John Hancock).

Experienced and Supportive Sponsor and Management Team

• PTI was founded in October 2013 and benefits from significant financial strength and long-term stability from its
investors, The Blackstone Group (over $545bn AUM) & John Hancock Life Insurance (over $850bn AUM). These
sponsors are highly reputable and have significant expertise in the towers market. PTI has an experienced
management team that have been at the forefront of the tower industry for over a decade and have a proven track
record of successfully developing high quality tower portfolios that have delivered consistent financial results.

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