Cityfibre Hail Largest £1.12bn Debt Financing for UK Full Fibre Rollout

Cityfibre has today confirmed that they’ve put in place a new debt financing package worth £1.12bn, which will support their wider £2.5bn roll-out (details) of a new 1Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network to cover 5 million premises across 37 UK cities and towns by the end of 2024.

The deployment project, which is being supported by Vodafone, officially started last year with a funding pot of £500m (Phase One) and this was recently increased to £2.5bn. At the time the operator noted that this investment would reflect a combination of debt and equity, although the exact details were not revealed.

Today Cityfibre has followed this up by announcing that they’ve put in place a debt package of £1.12 billion from seven major financial institutions, including ABN AMRO, Deutsche Bank, Lloyds Bank plc, Natixis, NatWest, Santander and Société Générale. The operator claims that this is the “largest debt financing package dedicated to full fibre rollouts in the UK’s history” and will support their initial roll-out to 2 million premises.

The package includes a £775 million seven-year capex facility and £45 million revolving overdraft and working-capital facility. It also includes a £300 million accordion facility. Rothschild & Co acted as financial adviser to CityFibre and Latham & Watkins as legal adviser.

Terry Hart, CityFibre’s Chief Finance Officer, said:

“The appetite from these institutions to support our financing is further evidence that CityFibre’s strategy is the right one for the UK.

As our networks are rolled out, this will benefit everyone, driving innovation and increasing fibre penetration across the UK, providing the future-proof digital connectivity the UK needs.

CityFibre’s target to reach five million homes by 2025, as well as thousands of businesses and public sector sites, will catalyse huge economic growth in regional towns and cities across the country.”

Cityfibre is currently in the process of hiring 5,000 engineers to support their roll-out (challenging in the current market, where demand for such skilled telecoms engineers often outstrips supply).

Current 10 Phase One Areas by Order of Announcement
Milton Keynes (£40m)
Aberdeen (£40m)
Peterborough (£30m)
Edinburgh (£100m)
Coventry (£60m)
Huddersfield (£30m)
Stirling (£10m)
Cambridge (£20m)
Leeds (£120m)
Southend-on-Sea (£35m)

The 27 Future Areas Under £2.5bn Plan
Bath
Batley
Bournemouth (already has a legacy FTTH network to c.20k premises from Cityfibre)
Bracknell
Bradford
Bristol
Crawley
Derby
Dewsbury
Doncaster
Glasgow
Halifax
Harrogate
Leicester
Maidenhead
Manchester
Newcastle-upon-Tyne
Northampton
Nottingham
Reading
Rotherham
Sheffield
Slough
Southampton
Swindon
Wakefield
Worthing