Contract payments on high-quality fiber lines from a highly diverse retail customer base will provide the collateral to secure $1.9 billion in asset-backed securities (ABS) from Metronet Infrastructure Issuer, 2023-1.
The current deal is an issuance from a master trust that floated $1.2 billion in notes last September. Collateral on the deal includes fiber networks across nine states and 138 issuer-defined markets,
Among the markets that the deal serves, the largest accounts for 9.4% of the deal's annualized run rate revenue (ARRR), according to Fitch Ratings, which expects to assign ratings to the issued notes.
Goldman Sachs and KKR Capital Markets will act as both structuring agent and underwriter on the deal, Metronet Infrastructure Issuer, Secured Fiber Network Revenue Notes, Series 2023-1. Drivetrain Agency Services will service the notes. Similar to other deals in this asset class, Metronet has a backup manager—in this case FTI Consulting—performance triggers related to cash flow decline, a six-month liquidity reserve and an anticipated repayment date (ARD) structure.
Some 323,723 residential contracts, which account for 80% of the pool, are in the deal. Customers are paying for fiber lines that offer speeds of 1 gigabit per second, and plans to double speeds. Commercial customers account for the rest of the collateral, and their speeds go up to 10 Gbps.
Fitch said it intends to assign ratings of 'A' to the $487.1 million class A-2 notes; 'BBB' to the $67.3 million, class B notes; and 'BB-' to the class C notes. All of the notes have anticipated repayment date of February 2028, and a rated final payment date of April 2053.
