Zayo has made two interesting announcements this week, one on a broad network upgrade and the other on the financial front.
Zayo is not exactly shy when it comes to investing in its network infrastructure, but there is apparently room to step things up even further over the next 18 months. The company says it will be investing somewhere near $250M in upgrades and new infrastructure across its footprint.
A bunch of that will be going into the longhaul dark fiber routes they are building in the US of course. They will also be investing in upgrades to 400Gbps and higher wavelengths and adding new subsea routes to match. The majority of the 400Gbps upgrades will be in place by the end of this year.
Meanwhile, Zayo has raised what it calls the first ESG-linked term loan by a US bandwidth infrastructure company. The $750M instrument links Zayo’s cost of capital to its progress toward greenhouse gas reduction targets and diversity initiatives.
They will use the funds for the usual laundry list of things: organic growth like the infrastructure investments above, M&A activity such as the recent ENA purchase, and general corporate purposes. Environmental, Social, and Governance financing of this sort is a growing trend, and I’m sure we will see more such instruments announced this year.
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