STRATS SM TRUST FOR U S CELL CORP SEC SERIES 2004 6 (GJH) stock intrinsic value fair value estimate & owner earnings analysis

What this is. GJH is not an operating company. It is the Class A-1 certificate of the STRATS Trust for United States Cellular Corporation Securities, Series 2004-6, a trust set up in April 2004 by Synthetic Fixed-Income Securities, Inc., with U.S. Bank Trust National Association as trustee. The trust holds one asset: $12.5 million of United States Cellular Corporation 6.70% Senior Notes due December 15, 2033. United States Cellular has since been renamed Array Digital Infrastructure, Inc. The trust issued 1,250,000 certificates of $10 each. Each certificate is owed a fixed 6.375% a year, paid as $0.31875 every June 15 and December 15, plus $10 back when the notes mature on December 15, 2033. The small difference between the 6.70% the notes pay and the 6.375% passed to certificate holders goes to a separate interest-only class. The trust pays no fees out of the interest it collects, has no interest-rate swap, and has no business to grow. What an owner holds is a contract, so we value it from the contract's cash flows, discounted at 6%. What it has been paying. The trustee's statements for June 2024, June 2025 and June 2026 each show the full $0.31875 per certificate paid, no principal returned, no interest left unpaid and all 1,250,000 certificates still outstanding. The June 2026 statement confirms the trust still holds the full $12.5 million of the 6.70% notes. What happened to the issuer. On August 1, 2025, United States Cellular sold its wireless business and some spectrum to T-Mobile for $4.29 billion, made up of $2.63 billion in cash and $1.67 billion of debt that T-Mobile took on through an exchange offer. In that exchange, holders of $488.9 million of the 6.70% notes swapped them for T-Mobile debt. The trust did not take part, so $55.1 million of the 6.70% notes remain owed by Array, and $12.5 million of that sits in this trust. Certificate holders therefore depend on Array, not T-Mobile. Array is now a much smaller company. It owns 4,450 towers in 19 states, which earned $154.7 million of site rental revenue in 2025. T-Mobile has signed a 15-year lease on space on at least 2,015 of those towers and extended its leases on about 600 more for 15 years. Array also owns minority stakes in wireless partnerships run mainly by Verizon and AT&T, which paid Array $150.3 million in cash in 2023, $168.7 million in 2024 and $215.6 million in 2025. The 2025 figure includes a one-time $42.5 million. Array sold spectrum to AT&T for $1.02 billion in January 2026, to T-Mobile for $168 million in May 2026 and to Verizon for $1.0 billion on June 1, 2026. It paid out most of that money to its shareholders as special dividends of $10.25 a share in February 2026 and $11.00 a share in June 2026. At the end of 2025 it still held spectrum carried at $1.58 billion, mainly C-Band, that was not under a sale agreement. Array's debt and credit. At December 31, 2025, Array owed $688.9 million: $325 million on a CoBank term loan due June 2030, with $292.5 million of it payable in 2030, and $363.9 million of senior notes, including the 6.70% notes. It held $113.4 million of cash. At a weighted average rate of about 6.1%, the interest bill comes to roughly $42 million a year, about a quarter of what the wireless partnerships alone have been paying out. Array reported that it was in compliance with its loan covenants, which cap leverage at 3.5 times and require interest to be covered at least 3 times. It also stated that it has not failed to make, and does not expect to fail to make, any scheduled payment of principal or interest. Its issuer ratings are Ba1 from Moody's, BBB- from S&P and BB+ from Fitch, all with stable outlooks, which is the border between investment grade and speculative grade. Base case, $10.44 per certificate. Array pays every coupon and repays the notes on December 15, 2033. Holders receive 15 more payments of $0.31875, from December 2026 through December 2033, plus $10 at the end. This case rests on the trust's record of full payment and on Array's current interest coverage. Because 6.375% is slightly above our 6% rate, the certificate is worth a little more than $10. The figure also includes about $0.18 of interest that has built up since the June 15, 2026 payment. Bear case, $8.27. The bear case rests on risks the filings name. The most important is that Array's standalone tower business barely covers its own costs. In 2025 site rental revenue of $154.7 million was offset by $79.5 million of tower operating costs and $84.4 million of overhead. Array also expects T-Mobile to cancel interim leases on about 1,800 towers before their 30-month term ends. DISH Wireless has claimed it no longer owes Array under its lease and has missed some payments. Array has sent nearly every dollar of its asset sales to shareholders, so the cushion behind the notes shrinks each time. The largest dated obligation is the roughly $292.5 million term-loan payment due in 2030, and the subsidiary guarantees on Array's bank credit line put those lenders ahead of the noteholders on the assets of the subsidiaries. In the bear case Array cannot refinance that 2030 maturity on workable terms and restructures its unsecured debt. Coupons are paid through December 2029, and holders then recover 80% of face value, or $8.00 per certificate, in December 2030. We set recovery that high because the partnership stakes and the 4,450 towers are worth well above Array's total debt. We did not model a deeper loss. Nothing in the filings points to one, and the partnership cash flows have been rising. Bull case, $10.44. Nothing can pay more than the contract, and the certificates cannot share in any upside at Array. The contract also caps the upside in two ways. Since April 2009, holders of call warrants on the trust have been able to purchase the underlying notes at face value plus accrued interest, and when they do, certificates are redeemed at $10 plus accrued interest. Array can also redeem the 6.70% notes early at a make-whole price, but any premium above face value goes to the warrant holders, not to certificate holders. If the certificates were retired this way at the December 2026 payment date, they would be worth about $10.18 today. The warrants have not been used in 17 years, since all 1,250,000 certificates remain outstanding, so we treat full payment to 2033 as the best realistic outcome, which is the same as the base case. Why the earlier estimate gave no value. Our earlier analysis gave no value because the trust has no operations to measure. That was the wrong approach. A certificate that is owed fixed payments by a named issuer can be valued directly from those payments, and that is what this analysis does. What it appears to be worth. About $10.44 per certificate, in a range of $8.27 to $10.44. The value depends almost entirely on one question: whether Array keeps paying its senior notes through December 2033. The return implied from any price is mostly the yield at that price. From the margin-of-safety price of $7.50, full payment to 2033 implies about 12% a year, and the bear case implies about 9% a year. A 20% annual rate would be implied only from a price reached during a period of stress followed by a move back toward $10. The trust is small, with $12.5 million of face value, so trading may be thin. What would make this wrong. A deeper deterioration at Array than the bear case assumes, such as the loss of the wireless partnership distributions, a failed refinancing in 2030 with a lower recovery, or further payouts to shareholders that leave little behind the notes. There is also a feature specific to the trust: if Array stopped filing reports with the SEC, the trustee could be required to sell the notes and pass the proceeds to holders, and those proceeds could be less than the value of the remaining payments. Nothing in the filings indicates that Array plans to stop reporting.