Fidium has gained $1.283 billion in funding using asset-backed securitization (ABS), building on a previous ABS deal inked back in May. At that time, the company was known as Consolidated Communications.
ABS financing is secured by revenues and contracts associated with a preferred portion of a company’s assets, enabling the company to get more favorable terms and conditions. In the latest Fidium deal, the assets are “existing and future fiber-enabled customers across certain states and the fiber optic and network infrastructure to support these customers.”
The ABS approach came to the broadband industry several years ago after previously emerging in the data center industry. Most broadband deals have been secured with fiber optic assets because the revenues associated with those assets are considered low-risk.
Broadband providers that have obtained ABS financing backed with fiber assets include Frontier, Zayo, and Ting.
Cable and broadband provider Altice recently broke the mold by obtaining ABS financing backed with hybrid fiber coax assets.
In the new deal, Fidium was issued three classes of notes with an anticipated repayment date of December 2030. The notes have a weighted average coupon of approximately 5.9%, Fidium said.
Morgan Stanley acted as the sole structuring agent and lead left active bookrunner on the deal, as it did for the May deal. The May deal was for $1.34 billion.
Fidium’s news comes just a few weeks after the company’s soon-to-be CEO Gaurav Juneja expressed enthusiasm for ABS financing in an interview with Telecompetitor. “The better you perform, the more you can tap into it,” Juneja said about ABS. “The biggest advantage of it is that it’s based on fiber growth.”
