Business
Ting completes a second asset-backed securitization for $63 million to support its fiber network expansion
TORONTO, Aug. 20, 2024 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC), announced today that its subsidiary, Ting Fiber, LLC ("Ting"), has closed an
About this update from Tucows Inc.
[{"type":"text","content":"TORONTO, Aug. 20, 2024 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC), announced today that its subsidiary, Ting Fiber, LLC (\"Ting\"), has closed an offering by one of its subsidiaries for $63 million. The offering consists of Series 2024-1 Fixed Rate Senior Secured Notes, Class A-2 and Class B, (collectively, the \"Notes\"), maturing August 2054. All figures are in U.S. dollars.\n\nTing will use the net proceeds from the Notes to fund the expansion of its fiber networks, create capacity for growth, and other general corporate purposes, including paying the fees and expenses related to the issuance of the Notes.\n\"The securitization provides Ting with an efficient vehicle to raise capital to continue funding our network expansion. Since the initial Ting ABS in May 2023, Ting has generated further borrowing capacity by adding 29,000 serviceable addresses and 9,500 customers,\" said Ting CEO and Tucows President and CEO, Elliot Noss. \"The success of fiber operator securitizations reinforces our macro view: the market recognizes the long-term profitability of the U.S. coax-to-fiber transition, and the ABS product provides a low-risk instrument for investors to participate.\"\nTing will be leveraging its existing wholly-owned, bankruptcy-remote special purpose vehicle (the \"Issuer\") that holds the equity for all Contributed Markets and receives all payments from existing and future residential and business customers. The Contributed Markets include approximately 125,000 residential and business Ting-owned serviceable addresses and 45,500 customers across six states. Ting will be engaged on an arm's length basis as manager to continue operating the networks and delivering its high-quality service to customers.\nThe Notes are priced at a weighted average coupon of 5.9% and will be issued at par. The weighted average yield on this issuance represents a 150 bps decrease compared to the weighted average yield on Ting's 2023-1 Class A-2 and Class B notes. The cumulative outstanding balance of both the 2023 and 2024 ABS notes amounts to 8.1x the annualized run rate collections, net of management fees at the time of the notes underwriting.\nThe securitization contains standard covenants and other investor protections, including that all securitization entities are bankruptcy-remote special-purpose entities and has been set up as a ...