KBRA Assigns Preliminary Ratings to ExteNet Issuer, LLC, Series 2024-1 Senior Secured Notes

KBRA is assigning preliminary ratings to the Series 2024-1 Class A-2 Notes, Class B Notes, and Class C Notes (the Series 2024-1 Notes) from ExteNet Issuer, LLC, (the Issuer), a communications infrastructure securitization.

The Series 2024-1 Notes are anticipated to be issued by ExteNet Issuer, LLC (the Issuer) and represents ExteNet Systems, LLC’ (ExteNet, the Company, or the Manager) second securitization. The transaction structure is a master trust, and as such, the indenture permits the issuance of additional classes and series of notes. The proceeds from the sale of the Notes will primarily be used to repay the Series 2019-1 Notes, fund certain expenses and accounts, and for general corporate purposes.

The business of the asset entities listed in the Transaction Parties Section consists of owning, managing and operating multi-carrier and multi-technology DNS, which are licensed for use by mobile network operators and other commercial enterprises in both indoor and outdoor spaces, although the collateral as of the 2024-1 closing date will only include outdoor spaces. The assets also include related antennas, fiber, other equipment, and the related distributed network system agreements (DNS Access Agreements) entered into with the relevant property owner, utility, or municipal authority to use locations where the equipment can be placed (DNS sites). The assets also include customer contracts between the Asset Entities and the customers (DNS Licenses) and rights to connect and utilize the equipment, including master customer contracts that cover multiple DNS sites. Each discrete collection of outdoor DNS Sites and related DNS Equipment within a specific geographic area under one or more DNS Licenses, and each collection of DNS Sites and related DNS Equipment contained on the same property is referred to as DNS Network. Together, the DNS Sites and DNS Networks along with related agreements are the DNS Assets.

As of December 31, 2023 (Statistical Cut-Off Date), the collateral included 137 DNS Networks across 26 states, and had an aggregate Annualized Run Rate Revenue (ARRR) of approximately $63.3 million and an aggregate Annualized Run Rate Net Cash Flow (ARRNCF) of $35.1 million. The primary Licensees at the DNS Sites are providers of wireless telephony/data services, including Verizon Wireless, Inc., AT&T Inc. and T-Mobile USA, Inc (which together comprise 98.9% of ARRR). The weighted average remaining tenant lease term based on ARRR is approximately 4.5 years without renewals and 14.8 years including renewals. These tenant leases include rent escalations with a weighted average escalation of approximately 1.7% per year.

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Methodologies

• ABS: Communications Infrastructure Securitization (CIS) Global Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1005015

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