Deutsche Glasfaser, a fiber-to-the-home (FTTH) provider in Germany, which is backed by EQT Infrastructure and OMERS, today announced that it has signed a debt financing agreement totaling €5.75bn, with a consortium of lenders, for the purposes of i) refinancing its existing debt and ii) providing incremental capital to invest in fiber optic deployments in Germany. Notably, this deal represents the largest fiber optic financing transaction in Germany.
Overall, Deutsche Glasfaser provides fiber optic internet connectivity to private households and businesses, primarily in rural municipalities of Germany. Previously, the company had committed to invest €7bn+ into the roll-out of fiber infrastructure in Germany “over the coming years”. As such, Deutsche Glasfaser’s fiber deployment plan will be largely debt-funded.
Debt Refinancing – Deutsche Glasfaser
Deutsche Glasfaser’s €5.75bn debt financing includes a €3bn term loan, €2.5bn CapEx facility, and €250m revolving credit facility. Additionally, the company has obtained an uncommitted credit facility (i.e., accordion feature), which allows commitments to be increased by a further €1.5bn.
Deutsche Glasfaser’s sustainability-linked refinancing was coordinated by ING and Crédit Agricole CIB. Significant lenders in the consortium include AXA IM Alts, Generali Global Infrastructure (GGI), Kommunalkredit, LBBW, and National Australia Bank (NAB).
Sustainability-Linked Refinancing
Deutsche Glasfaser’s loans have an interest rate which is linked to Environmental, Social, and Governance (ESG) criteria. Specifically, Deutsche Glasfaser’s ESG criteria includes reducing carbon dioxide (CO2) emissions, pace of connecting underserved areas, and annual employee surveys. In turn, the company expects to generate interest expense savings of €50m over the duration of the 7-year loan facilities.
Existing Fiber-to-the-Home (FTTH) Network
Presently, Deutsche Glasfaser has passed 1.2 million households with fiber in rural areas of Germany and has >650k B2C contract customers, implying a penetration rate of 50%+. Additionally, the company is operating at a pacing of 400k fiber passings per year, having laid 9.3k miles (15k kilometers) of fiber in 2021.
Deutsche Glasfaser’s Fiber Presence in Germany
Use of Proceeds
As part of securing this €5.75bn debt financing, Deutsche Glasfaser plans to accelerate its fiber optic deployments in Germany. By 2025, the company intends to double its pacing to 800k fiber passings per year and reach a total of 4 million passings in Germany, equivalent to ~10% of all households in Germany.
Long-Term
Subsequently, by 2030, Deutsche Glasfaser targets passing 6 million households with fiber optic connectivity in Germany.
Open Access Wholesale Fiber Network
Deutsche Glasfaser operates and builds an open access wholesale fiber network. Therefore, the company’s network is open, via wholesale agreements, to other internet service providers (ISPs) to offer broadband services to end users. Presently, Deutsche Glasfaser’s broadband partners include Telekom Deutschland (Deutsche Telekom), Vodafone Germany, and 1&1 Versatel, amongst others.
Beyond Deutsche Glasfaser, recent commitments to Germany’s fiber-to-the-home (FTTH) market include UBS Asset Management (Lünecom), Basalt Infrastructure (goetel), InfraVia Capital (Liberty Global JV), iCON Infrastructure (SFN), and IFM Investors / Deutsche Telekom (GlasfaserPlus).
Management
Deutsche Glasfaser is led by Thorsten Dirks as Chief Executive Officer, Guido Eidmann as Chief Operations Officer, and Jens Müller as Chief Financial Officer.
Ownership
Deutsche Glasfaser is 51%-owned by the funds EQT Infrastructure IV and V. Additionally, OMERS Infrastructure, part of Canadian pension fund OMERS, owns a 49% minority stake in the company.
