UNIT

Uniti Group Inc

Finance/Real Estate, Credit


Presented:08/17/2017
Price:$19.51
Cap:$3.31B
Current Price:$5.69
Cap:$1.39B

Presented

Date08/17/2017
Price$19.51
Market Cap$3.31B
Ent Value$7.91B
P/E RatioN/A
Book ValueN/A
Div Yield12.3%
Shares O/S169.66M
Ave Daily Vol1,523,024
Short Int4.16%

Current

Price$5.69
Market Cap$1.39B
Uniti Group, Inc. is a real estate investment trust company, which is engaged in the acquisition and construction of mission infrastructure in the communications industry. It focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. The company operates through four segments: Leasing, Fiber Infrastructure, Tower and Consumer CLEC. The Leasing segment represents its REIT operations, including the results of its tower and ground lease operations. The Fiber Infrastructure segment represents the operations of the Uniti Fiber business. The Consumer CLEC segment represents the operations of its Consumer CLEC Business and corporate expenses directly attributable to the operation of that business. Uniti Group was founded on April 24, 2015 and is headquartered in Little Rock, AR.

Publicly traded companies mentioned herein: Centurylink Inc (CTL), Frontier Communications Corp (FTR), Uniti Group Inc (UNIT), Windstream Holdings Inc (WIN), Zayo Group Holdings Inc (ZAYO)

Highlights

Uniti Group (UNIT), formerly known as Communications Sales & Leasing (CS&L), is a telecom infrastructure REIT. Windstream (WIN) completed the tax-free spin-off of CS&L in early 2015, but the idea that other telecoms would utilize a REIT structure to monetize their networks never gained traction; as such, UNIT is one of a kind. Windstream’s annual lease payment ($650mm) continues to make up the majority of Uniti’s revenue and EBITDA. Additionally, the presenter said the lease payment is 103% of Uniti’s dividend. With WIN shares buckling under the weight of ~$10.5bn of debt, the presenter has chosen to express his bearish view via a combination of a short position in UNIT stock (~$20) and a long position in UNIT’s Senior Secured and Unsecured bonds, including: UNIT 6 04/15/23, UNIT 8¼ 10/15/23, and UNIT 7⅛ 12/15/24. He noted that the debt helps cover the cost of carry, which includes a 12% yield at the current stock price, as well as the risk that “things get miraculously better” for Windstream and/ or Uniti near-term.

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