UPDATED: CityFibre puts in place debt package of £1.12bn to underpin capital investment

CityFibre has put in place a debt package of £1.12 billion to support capital investment across the UK, including towns and cities in Yorkshire. .

CityFibre is investing in Yorkshire

Proceeds from this infrastructure debt package will be used to fund the first part of CityFibre’s £2.5 billion investment plan, which will see it roll-out full fibre to five million homes, a third of the Government’s target of 15 million homes by 2025.

CityFibre has put in place a debt package with support from seven major financial institutions including ABN AMRO, Deutsche Bank, Lloyds Bank plc, Natixis, NatWest, Santander and Société Générale.

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In a statement, Cityfibre said: “This is the largest debt financing package dedicated to full fibre rollouts in the UK’s history and represents an important milestone in CityFibre’s plan to improve the country’s digital future.

“The clear support of some of Europe’s largest financial institutions is a strong endorsement of CityFibre’s strategy and further validates its business model.”

The debt package will be used to fund the deployment of the first two million homes of CityFibre’s five million homes target.

It will also expand CityFibre’s existing full fibre networks in 37 previously announced towns and cities nationwide. As well as connecting homes, CityFibre’s full fibre network is designed to serve all businesses and public sector sites.

The statement added: “CityFibre’s access to the debt market is an important step in creating a large-scale open-access platform that provides genuine choice and supports innovation, as well as catering for emerging demand for smart city enablement and dense 5G small-cell deployments. CityFibre is building a network that offers dramatically faster speeds to internet-service providers and mobile operators, while also significantly improving service levels and reliability.”

The debt package includes a £775 million seven-year capex facility and £45 million revolving overdraft and working-capital facility. It also includes a £300 million “accordion” facility. Rothschild & Co acted as financial adviser to CityFibre and Latham & Watkins as legal adviser.

CityFibre has already announced that its fibre-to-the-home rollout will take place in 10 towns and cities, including Leeds and Huddersfield.

A total of 27 towns and cities with existing CityFibre infrastructure are also due to receive additional investment, including Batley, Bradford, Dewsbury, Doncaster, Halifax, Harrogate, Rotherham, Sheffield and Wakefield.

Terry Hart, CityFibre’s Chief Finance Officer, said: “The appetite from these institutions to support our financing is further evidence that CityFibre’s strategy is the right one for the UK.

“As our networks are rolled out, this will benefit everyone, driving innovation and increasing fibre penetration across the UK, providing the future-proof digital connectivity the UK needs.

“CityFibre’s target to reach five million homes by 2025, as well as thousands of businesses and public sector sites, will catalyse huge economic growth in regional towns and cities across the country.”

Responding to the announcement, Henri Murison, Director of the Northern Powerhouse Partnership, tweeted: “This is great news for Yorkshire and the Northern Powerhouse with CityFibre so present here.”

Speaking earlier this year, Coun James Lewis, Leeds City Council’s executive member for resource and sustainability, said: “Encouraging and facilitating investment from private sector providers like CityFibre is an important part of our strategy to help us realise our ambition that all premises in the district, residential and commercial, are able to access gigabit capable services and take advantage of new technologies.”

CityFibre’s strategy is focused on developing fibre provision in cities and towns outside London. The company is jointly controlled by Antin Infrastructure Partners and West Street Infrastructure Partners, a fund managed by Goldman Sachs.