The deal, Zayo’s second asset-backed securitisation of the year, highlights growing investor confidence in fibre infrastructure as demand for high-capacity connectivity accelerates.
For those not clued up on financial lingo, Zayo is essentially securitising part of its fibre network: bundling the revenue from specific network assets (in this case, the Midwest and Northeast US) and then selling that cashflow to investors in the form of bonds (or “notes”).
These notes are typically divided into tranches, each offering different levels of risk and return.
The firm’s latest securitisation is designed to improve its balance sheet at a time when Zayo is actively expanding its footprint, including plans to roll out 5,000 new fibre route miles.
Jeff Noto, chief financial officer at Zayo, said: “This transaction demonstrates Zayo’s continued momentum in the capital markets, building on the success of our inaugural asset-backed securitisation completed earlier this year.
“We are pleased to see continued strong demand from investors who share our conviction in critical fibre infrastructure as the proliferation of AI increases demand for high bandwidth connectivity.
This marks Zayo’s second asset-backed securitisation, following its inaugural $1.42 billion deal completed in the first quarter of 2025.
The latest issuance will see notes offered across three tranches: $1.1 billion in Class A-2 term notes at 6.0%, $177.7 million in Class B notes at 6.6%, and $248.8 million in Class C notes at 9.5% — all with an anticipated repayment date of June 2030.
Collectively, the notes carry a weighted average coupon of approximately 6.6%.
“We look forward to the completion of this transaction, which will enhance our balance sheet and support additional investment in our network to enable economic growth and innovation across the US,” Noto added.
The funding news comes after Zayo secured a deal to acquire Crown Castle’s fibre assets.
Following the unveiling of the deal, Jonathan Friesel, senior managing director and head of fibre at Zayo’s parent DigitalBridge, described the transaction as “transformational,” with it set to add nearly 90,000 fibre miles to Zayo’s existing network.
