Zayo Issuer, LLC Secures Preliminary Ratings from KBRA

Zayo Issuer, LLC's Preliminary Ratings Journey

KBRA has excitingly assigned preliminary ratings to the Series 2025-1 Class A-1-L Notes, Class A-2 Notes, Class B Notes, and Class C Notes issued by Zayo Issuer, LLC. This marks a significant milestone as the Issuer embarks on its first securitization venture, promising to reshape its financial landscape.

Structure of the Transaction

The structure of the Series 2025-1 transaction operates under a master trust framework. This flexible arrangement allows the indenture to accommodate the issuance of additional classes and series of notes. These additional issuances will depend on the confirmation from rating agencies, ensuring ongoing compliance and maintaining investor confidence.

Usage of Proceeds from the Notes

Proceeds generated from the sale of the Series 2025-1 Notes will play a crucial role in funding various aspects of the business. Primarily, these funds are designated for establishing reserve accounts, including a liquidity reserve account that bolsters financial stability. Furthermore, the capital can also support transaction fees and general corporate purposes, with potential allocations towards capital expenditures necessary for growth and operational efficiency.

Understanding Zayo's Business Model

Zayo operates an extensive long-haul and dense metro fiber network crafted to provide robust connectivity solutions. This infrastructure serves a diverse array of commercial customers. Uniquely, the parent company, Zayo Group, LLC, has characterized its offerings as “big pipes to big customers.”

Service Segments in the Northeastern Region

Zayo Northeast, LLC, a fully owned subsidiary of the Issuer, focuses on two primary service segments in the northeastern part of the U.S. The first includes the extensive dark and lit fiber infrastructure, along with a robust transport services business. This segment encompasses long-haul and metro dark fiber services, wavelengths, various private networks, and essential mobile infrastructure.

Connectivity Services

The second focal point of Zayo Northeast is its lit fiber network connectivity services. This segment provides crucial internet access, high-speed Ethernet, IP transit, and private cloud connectivity tailored for 'connectivity customers.' Such fiber services are pivotal, enabling seamless high-speed data traffic between business locations, data centers, cloud networks, and the expansive global internet. Additionally, Zayo provides backhaul services for wireless towers, connecting vital sites to extensive terrestrial networks.

Customer Base and Revenue Breakdown

As of a recent cut-off date, Zayo Issuer's securitized portfolio boasts service provision to 1,686 customers across more than 15 distinct product service lines. This diversification is a testament to Zayo's extensive reach and operational capability. Interestingly, an analysis of revenue composition revealed that approximately 75.5% derived from fiber and transport services, while about 24.5% came from network connectivity services by this noted date.

Getting More Information

For those seeking detailed insights into the ratings, methodologies, and further disclosures concerning the credit ratings assigned, these documents are readily available. These resources include comprehensive breakdowns that elaborate on the methodologies employed and the specific credit considerations assessed during the process.

About Kroll Bond Rating Agency (KBRA)

Kroll Bond Rating Agency, LLC (KBRA), stands out as one of the prominent credit rating agencies, registered with the U.S. Securities and Exchange Commission as an NRSRO. Additionally, KBRA maintains registrations across various regions, including Europe and the UK. This expansive recognition showcases KBRA's commitment to providing reliable and comprehensive credit ratings across different markets.

Frequently Asked Questions

What are the Series 2025-1 Notes issued by Zayo Issuer?

These are the first securitized notes from Zayo Issuer, LLC, including Class A-1-L, Class A-2, Class B, and Class C Notes, aimed at funding various corporate purposes.

How will proceeds from the Series 2025-1 Notes be used?

Funds will be allocated to reserve accounts, transaction fees, and general corporate purposes, including potential capital expenditures.

What does Zayo's infrastructure entail?

Zayo's infrastructure comprises a long-haul and dense metro fiber network that provides extensive connectivity to commercial customers.

What services does Zayo Northeast, LLC offer?

Zayo Northeast offers dark and lit fiber infrastructure, transport services, and connectivity services tailored to meet the demands of various customers.

Why are the ratings from KBRA significant?

These ratings serve as essential indicators of the creditworthiness of the Series 2025-1 Notes, influencing investor confidence and market perception of Zayo Issuer, LLC.

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