A pool of revenue from pure-play fiber network contracts will back $1.2 billion in asset-backed securities (ABS) in a joint issuance from two entities under the Fidium name.
Fidium and Fidium Fiber Finance will issue notes through a master trust, through series 2025-4. It is the second securitization for the entities, which will sell the notes through three classes of A, B and C notes, which have the same December 2030 anticipated repayment date and December 2055 repayment date, according to Kroll Bond Rating Agency.
Morgan Stanley is the sole structuring agent and lead bookrunner, according to KBRA.
The transaction will repay investors in order of seniority, and interest and principal on the class C notes is subordinated to principal payments on classes A and B.
In addition to that subordination, the deal structure includes cash trap and sweep conditions. If on any payment date, the senior debt service coverage ratio (DSCR) is 1.75x or less, then half of available funds will be deposited into the deal's cash trap reserve account.
If the senior DSCR falls below 1.50x, then the deal will start an amortization period. During that condition, no interest of principal will be paid to the class C notes until the class A notes and class B notes have been repaid fully.
Fidium Manager Services is one of the country's leading fiber operators, with residential and commercial customers in 21 states. Contracts from nineteen of those markets contributed to the asset pool, according to KBRA.
Contracts to customers in Maine, New Hampshire and Texas account for 65.9% of the revenue in the deal, KBRA said.
KBRA assigns ratings of A-, BBB and BB- to classes A2, B and C, respectively.
