Global Switch secures industry leading financing
- Successful closure of a new £425 million revolving credit facility, upsized from £375 million
- Highly attractive terms, including a four-year tenor with options to extend and an industry leading sub 1% margin
- Further supports Global Switch’s growth following the introduction of a new strategic investor in December 2016
In addition to HSBC, Barclays Bank Plc, Credit-Suisse AG, London Branch and Deutsche Bank AG, London Branch, who were lenders under the previous RCF, remain as lenders and mandated lead arrangers under the new RCF. Global Switch is also pleased to announce that Bank of China Limited, London Branch has joined the syndicate as a lender and mandated lead arranger under the new RCF.
The new RCF is on highly attractive terms for Global Switch, including a longer tenor, a £50 million increase in the facility amount and improved pricing compared to the previous RCF. The committed facility term matures in 30 April 2021, with the option of two further one year extensions. The new margin, at sub 1%, together with other improved financial terms represents industry leading pricing. Financial covenants, where the company retains significant headroom, remain consistent with the old facility. The long-term commitment of the participating banks on these terms is a reflection of the strength of Global Switch’s business and its continued low leverage as reflected in its industry leading credit ratings.
Global Switch reviewed the terms of its previous RCF following the successful introduction, on 21 December 2016, of a new strategic investor, Elegant Jubilee Limited, to support the Company’s expansion. Global Switch also announced on 21 December that it had secured two major customer pre-commitments for data centre services in Hong Kong and Singapore. The new strategic investor will facilitate access by Global Switch to fast growing telecommunications and internet provider customers looking to expand outside of China as well as bringing its existing relationships with major Chinese banks to broaden the lending support available to Global Switch.
Funds drawn down under the new RCF will be used to refinance the prior RCF and for other working capital purposes.
John Corcoran, Chief Executive Officer of Global Switch, said:
“This new RCF is fantastic news for Global Switch, with industry leading terms that reflect the strength of our business model and balance sheet. The new contractual terms also provide certainty and flexibility of funding and will support our next phase of growth and development of the business.”
David Doyle, Chief Financial Officer of Global Switch, added:
“We are extremely pleased to have the continuing long-term support of HSBC, Barclays, Credit Suisse and Deutsche Bank, and we welcome Bank of China as a new lender under the RCF. We remain fully committed to maintaining low leverage over the long run and to further consolidating our current strong investment grade credit ratings.”
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