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Deutsche Glasfaser Group gets $6.5bn in Germany’s largest fibre financing to date

Deutsche Glasfaser has plans to supply 6 million households with fibre optics right into the house (FTTH), 4 million of them in the next four years.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

December 17, 2021 | 6:00 AM GMT

The Deutsche Glasfaser Group has agreed with a consortium of creditors on financing of €5.75 billion (US$6.49 billion).

The capital will be used in the expansion of fibre services to 4 million households in Germany by the end of 2025.

The transaction represents by far the largest fibre optic financing in Germany to date.

The main component of the financing is a €3 billion ($3.39 billion) loan. The transaction also includes a CAPEX facility for €2.5 billion ($2.82 billion) and a revolving credit line of €250 million ($282.46 million).

In addition, the lender Deutsche Glasfaser is holding out the prospect of an additional credit line (Accordion Facility) amounting to €1.5 ($1.69 billion) billion.

All of these loans have an interest rate that is also linked to ecological and social sustainability criteria (ESG).

The financing, which was coordinated by the ING and Crédit Agricole CIB banks, replaces existing loans and brings additional capital to the company.

Due to the high demand in the market, it was significantly oversubscribed, the group said.

Jens Müller, CFO of Deutsche Glasfaser, commented: “We have shown in the past few years that we can implement our ambitious plan for area-wide fibre optics in rural areas.

“The capital market is now rewarding that. This financing already ensures that we can continue to pursue this plan in the years to come and allows us to increase the pace of expansion. At the same time, the transaction will improve our financial flexibility. “

Deutsche Glasfaser has plans to supply 6 million households with fibre optics right into the house (FTTH), 4 million of them in the next four years.

The latter corresponds to around 10% of all households in Germany.

In the past ten years, Deutsche Glasfaser has reached 1.2 million households in rural areas of Germany.

The company has also plans to double its annual expansion rate from 400,000 households today to around 800,000 in 2025. Deutsche Glasfaser primarily relies on the private sector expansion.

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João Marques Lima

Founder and Editor, The Tech Capital

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