Contracts on fiber communications networks will secure $750 million in asset-backed securities to be some to investors from issuer Metronet Infrastructure Issuer, series 2025-4.
The deal will sell notes through three tranches of class A, B and C notes of a master trust structure, which all have an anticipated repayment date of December 2030 and a legal final maturity date of December 2055. Additional classes of notes can be issued from transaction, if they meet certain conditions, according to Kroll Bond Rating Agency.
Metronet Infrastructure's assets include so-called fiber-to-the-premise (FTTP) infrastructure, customer agreements, related easements and licenses and permits, according to KBRA. On an annualized basis, there is about $488.1 million in revenue supporting the securitization, and on a net basis has an annualized run rate revenue (ARRR) of about $334.7 million after senior expenses.
The underlying portfolio consists of 608,810 contracts, with two thirds of the cash flow supporting the transaction from a wholesale agreement with the MFA Supplier Group, InfraCo and T-Mobile, KBRA said.
The notes benefit from several credit boosting elements, including subordination.
After senior fees, Metronet Infrastructure will pay interest monthly on the remaining classes of notes, according to the rating agency. A liquidity reserve account is also in place that equals six months of fixed direct costs, senior fees and interest, KBRA said.
Another element of the deal structure are cash trap and cash sweep conditions. If the senior debt service coverage ratio (DSCR) is less than or equal to 1.70x, or if there is a payment default under the T-Mobile FA that causes a material adverse effect on the retained collections, then the deal will deposit half of all available funds into the cash trap account.
There is also a possibility that interest payments to the class C notes could be deferred in the deal, the rating agency said. No interest or principal payments will be made to the class C notes during an amortization period or after the transaction's anticipated repayment date (ARD), according to KBRA.
KBRA assigns ratings of A-, BBB and BB- to the A2, B and C tranches.
