Fiber networks and other digital assets are increasingly turning to structured capital, ranging from investments that blend elements of equity and debt, such as preferred equity and convertible debt, to asset-backed securities, or ABS. In 2023, Ropes & Gray advised Frontier Communications on a $2.1 billion fiber securitization financing.
Finance partner Christopher Poggi advised Frontier on its securitization and told The Deal in a recent article that fiber networks and data centers are good candidates for asset-backed securitization (ABS) because of the long-term stability of cash flows, low customer attrition and high barriers to entry.
“ABS has a lot of complexity you need to deal with to set up, but if you have the right mix of assets and you can achieve the ABS, the potential cost to capital savings is transformational for the companies,” said Poggi.
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