The Path to Closing: Clearing Title Hurdles in Large Infrastructure Securitizations

In our work on large infrastructure securitizations, title diligence can reveal a number of critical items spread across a portfolio of assets. The issues that surface often stem from decisions made years prior, before mortgage financing was the primary consideration. Recognizing these issues early on is required to remove any potential bottlenecks to closing.

Often our review uncovers undiscovered issues for financing deals. These issues were created years, sometimes even decades, earlier, and never impacted operations or gave cause for concern. For instance, Towers built in the 1990s and early 2000s were developed during a period when the industry’s primary focus was expanding coverage as quickly as possible. The detailed documentation and title requirements that lenders expect today weren’t top priorities at the time. As a result, issues like ownership questions, lease restrictions, and recording gaps can remain hidden until our review puts an interest under a microscope.

As our Commercial Title Counsel, Josh Davey puts it, “The telecom industry is fast paced and highly competitive, where the teams are focused on meeting coverage needs and portfolio expansion. Our job is to ensure our client’s business continues to operate smoothly, without any title roadblocks.”

Is this on the record?

One of the most common issues we uncover in our review is a discrepancy between the entity that claims ownership to an asset and what the public record says.

These situations often stem from years of acquisitions, corporate reorganizations, and internal transfers. Ownership may have changed multiple times. In some cases, a company acquired assets through a broader transaction and later moved them between entities for internal business purposes, without updating the public record. When these conveyances are not formally recorded, the public transfer process is left incomplete. Unresolved, this can lead to delays or add execution-risk in closing financings.

As our COO Lorelei Silvia notes, the legal ownership is often entirely sound — the problem is that it isn’t visible.

“You can look at it legally and it’s perfectly fine and sound, but nobody knows about it. In our world, if nobody knows about it, it doesn’t help you.”

While someone may have legal ownership, without this being evidenced on the record, a lender can’t confidently establish its security position. Often these situations are not created out of poor transactions, but an accumulation of small, quiet changes over time. By helping our clients re-establish an ownership history through locating missing documents or recording interests that were never formally updated, we have resolved many of these issues that created gaps in the chain or clouds on title.

Not all leases are the same

The property interest in most tower sites is created through a ground lease. The terms of these leases are often negotiated by different parties or divisions of a company, years before a securitization was ever contemplated. These often overlooked terms can either facilitate or complicate a financing transaction.

Two provisions tend to create the most friction.

The first is consent language. Many older leases require written landlord consent before an interest can be mortgaged. Across a portfolio of thousands of sites, obtaining those approvals can become a significant undertaking.

The second is outright restrictions on mortgaging or assigning the interest. These sites typically fall out of the mortgageable pool regardless of how much work goes into them.

Neither provision was necessarily problematic when the agreement was signed. As Davey notes, some of the earliest tower agreements were remarkably simple.

“We’re going to put a tower here for this money, and that’s all you get.”