MetroNet Completes Novel $1.219 Billion Asset-Backed Securitization, $160 Million Revolving Topco Facility and $1.5 Billion Revolving Warehouse Facility

Paul, Weiss advised MetroNet, an Indiana-based telecommunications company and the largest privately-owned fiber to the premises (FTTP) platform in North America, in connection with MetroNet’s corporate reorganization, its inaugural securitization and the closing of two additional lending facilities, a topco facility and a warehouse facility. MetroNet is a portfolio company of Oak Hill Capital and KKR.

MetroNet Infrastructure Issuer, LLC issued three classes of notes totaling $1,219,440,000, with the transaction collateral including the company’s FTTP infrastructure, its shared infrastructure assets and customer receivables in mature neighborhoods. The topco facility provides for a revolving credit facility with availability to borrow based on internet revenue from commercial and residential broadband services, and fiber network assets in newly developing markets, which will eventually be transferred to the warehouse facility once they hit certain maturity thresholds.

The warehouse facility provides for revolving loans of up to $1.5 billion backed by fiber network assets that have matured out of the topco facility, which will eventually be transferred into the securitization once they hit the next set of maturity thresholds.

Proceeds from the warehouse facility will be used to pay the company’s existing indebtedness and to further develop the fiber network assets backing the warehouse facility. Proceeds from the topco facility will be used to finance working capital needs and other general corporate purposes.

The Paul, Weiss team included, among others, corporate partners Robert Zochowski, Brian Lavin and David Huntington, and counsel Mikhel Schecter; and tax partner Lindsay Parks.