Zayo Group quietly made infrastructure history when the Denver-based fibre network company closed a $2.37 billion debt deal on April 24, using its US fibre assets as collateral to raise cash from bond markets.
This type of financing is called asset-backed securities, or ABS for short. It works by packaging reliable revenue streams (in this case, long-term contracts with businesses that depend on Zayo’s network) into bonds that investors buy. It’s a way to raise large amounts of capital without selling equity or taking on conventional bank loans.
Why does this matter? Zayo’s network carries enormous amounts of data for cloud platforms, AI applications, and the wireless towers that power 5G. Demand for that kind of bandwidth is growing fast, and keeping up requires constant investment in faster, denser fibre. The $2.37 billion primarily retires older debt while freeing up capacity for new expansion.
Zayo CFO Jeff Noto said, “This issuance further advances our ABS programme and is the largest securitisation issuance we’ve completed to date. It reflects the continued strength of our ABS programme and the market’s confidence in the cash flows generated by our fibre infrastructure. As we continue investing in our network to support growing demand, we’re focused on maintaining a strong capital structure, with the right liquidity and a staggered maturity profile.”
Investor appetite was strong, with the bonds priced at a weighted average rate of 6.5%, which is a sign that markets trust Zayo’s assets as solid collateral. This is Zayo’s fourth ABS deal, bringing its total raised through this structure past $6 billion.
Taken together, both stories point to the infrastructure of the future (physical and digital), which is expensive to build, and demands creativity and committed capital at scale.
Zayo has been around for 18 years and has empowered some of the world’s largest, most innovative companies to connect with their future.
The Zayo Group of Companies connects 400 global markets through future-ready networks encompassing over 32 million fibre kilometres (19.9 million fibre miles) and 238,000 route kilometres (148,000 route miles).