TORONTO, Aug. 20,
2024 /CNW/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC),
announced today that its subsidiary, Ting Fiber, LLC ("Ting"), has
closed an offering by one of its subsidiaries for $63 million. The offering consists of Series
2024-1 Fixed Rate Senior Secured Notes, Class A-2 and Class B,
(collectively, the "Notes"), maturing August
2054. All figures are in U.S. dollars.
Ting will use the net proceeds from the Notes to fund the
expansion of its fiber networks, create capacity for growth, and
other general corporate purposes, including paying the fees and
expenses related to the issuance of the Notes.
"The securitization provides Ting with an efficient vehicle to
raise capital to continue funding our network expansion. Since the
initial Ting ABS in May 2023, Ting
has generated further borrowing capacity by adding 29,000
serviceable addresses and 9,500 customers," said Ting CEO and
Tucows President and CEO, Elliot
Noss. "The success of fiber operator securitizations
reinforces our macro view: the market recognizes the long-term
profitability of the U.S. coax-to-fiber transition, and the ABS
product provides a low-risk instrument for investors to
participate."
Ting will be leveraging its existing wholly-owned,
bankruptcy-remote special purpose vehicle (the "Issuer") that holds
the equity for all Contributed Markets and receives all payments
from existing and future residential and business customers. The
Contributed Markets include approximately 125,000 residential and
business Ting-owned serviceable addresses and 45,500 customers
across six states. Ting will be engaged on an arm's length basis as
manager to continue operating the networks and delivering its
high-quality service to customers.
The Notes are priced at a weighted average coupon of 5.9% and
will be issued at par. The weighted average yield on this issuance
represents a 150 bps decrease compared to the weighted average
yield on Ting's 2023-1 Class A-2 and Class B notes. The cumulative
outstanding balance of both the 2023 and 2024 ABS notes amounts to
8.1x the annualized run rate collections, net of management fees at
the time of the notes underwriting.
The securitization contains standard covenants and other
investor protections, including that all securitization entities
are bankruptcy-remote special-purpose entities and has been set up
as a master trust, allowing Ting to efficiently securitize
additional fiber-optic infrastructure in the future, subject to
customary conditions.
The Notes are not registered under the Securities Act of 1933,
as amended (the "Securities Act") or any state securities laws, and
may not be offered or sold in the United
States absent registration or an applicable exemption from,
or a transaction not subject to, the registration requirements of
the Securities Act and applicable state securities laws. The Notes
were offered only to qualified institutional buyers under Section
4(a)(2) and to persons outside the United
States pursuant to Regulation S under the Securities Act.
This press release is not an offer to sell, nor a solicitation of
an offer to buy, any securities, nor shall there be any sale of
these securities in any state or jurisdiction in which the offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction.
Goldman Sachs acted as placement agent on the deal and Paul,
Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel
to Ting.
About Ting
Ting provides lightning-fast fiber Internet in select U.S. towns
and cities. Ting is committed to net neutrality and the open
internet. More than that, Ting is committed to being a part of
improving the communities it serves by supporting and championing
local good works. Ting sponsors local programs, events,
foundations, festivals, charities and public services everywhere we
go, investing in the future of the towns we serve.
About Tucows
Tucows helps connect more people to the benefit of Internet
access through communications service technology, domain services
and fiber-optic Internet infrastructure. Ting (https://ting.com)
delivers fixed fiber Internet access with outstanding customer
support. Wavelo (https://wavelo.com) is a telecommunications
software suite for service providers that simplifies the management
of mobile and Internet network access; provisioning, billing and
subscriptions; developer tools; and more. Tucows Domains
(https://tucowsdomains.com) manages approximately 25 million domain
names and millions of value-added services through a global
reseller network of over 35,000 web hosts and ISPs. Hover
(https://hover.com) makes it easy for individuals and small
businesses to manage their domain names and email addresses. More
information can be found on the Tucows corporate website
(https://tucows.com).
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this release that relate to the Company's future
plans, objectives, expectations, performance, events and the like
may constitute "forward-looking statements" within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.
Forward-looking statements are statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as "believe," "expect," "may,"
"will," "likely," "could," "should," "project," "could," "plan,"
"goal," "potential," "pro forma," "seek," "estimate," "intend" or
"anticipate" or the negative thereof, and may include discussions
of strategy, financial projections, guidance and estimates
(including their underlying assumptions), statements regarding
objectives, expectations or consequences of the securitized
financing facility, and statements about the future performance,
operations, products and services of the Company. Such
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those anticipated, including uncertainties regarding the
proceeds from the securitized financing facility, uncertainties
relating to the Company's future costs, Ting's role as an
arms-length manager and other risks and uncertainties detailed in
the Company's filings with the Securities and Exchange Commission,
including under "Item 1A. Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2022. All forward-looking statements
speak only as of the date hereof and are based on current
information, expectations and estimates and involve risks,
uncertainties, assumptions and other factors that are difficult to
predict and that could cause actual results and events to vary
materially from what is expressed in or indicated by the
forward-looking statements. In such an event, the Company's
business, financial condition, results of operations or liquidity
could be materially adversely affected and investors in the
Company's securities could lose part or all of their investments.
Readers are strongly urged to read the full cautionary statements
contained in those materials. The Company assumes
no obligation to update any forward-looking statements to
reflect events that occur or circumstances that exist after the
date on which they were made.
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SOURCE Tucows Inc.