Global Switch Holdings has closed a new revolving credit facility (“RCF”) with HSBC Bank plc as Agent.
Barclays, Credit-Suisse, Deutsche Bank and HSBC - who were lenders under the previous RCF - all remain as lenders and mandated lead arrangers under the new RCF. Global Switch is also pleased to announce that Bank of China has joined the syndicate as a lender and mandated lead arranger under the new RCF.
The new RCF is on highly attractive terms for Global Switch, benefitting from a longer duration, a ?50 million increase in the size of the facility and improved pricing compared to the previous RCF. The committed facility term matures in 30 April 2021, with the option of two further one year extensions. The new margin, at sub 1%, together with other improved financial terms, represents industry leading pricing, thus enabling Global Switch to continue to deliver value for money solutions for its customers as well as superior returns for its shareholders. Financial covenants, where the company retains significant headroom, remain consistent with the old facility. Funds drawn down under the new RCF will be used to refinance the old RCF and for other working capital purposes.
The long-term commitment of the participating banks on these terms is a reflection of the strength of Global Switch’s business and its continued low leverage, as reflected in its industry leading credit ratings.
Global Switch reviewed the terms of its previous RCF following the successful introduction, on 21 December 2016, of a new strategic investor, representing a consortium of Chinese corporate and institutional investors, to support the Company’s expansion.
Global Switch also announced on 21 December that it had secured two major customer pre-commitments for data centre services in Hong Kong and Singapore. The new strategic investor will facilitate access by Global Switch to fast growing telecommunications and internet provider customers looking to expand outside of China as well as bringing its existing relationships with major Chinese banks to broaden the lending support available to Global Switch.
John Corcoran, Chief Executive Officer of Global Switch, said:
“This new RCF is very good news for Global Switch; we are extremely pleased with the exceptional terms that reflect the strength of our business model and balance sheet. The new contractual terms also provide certainty and flexibility of funding and will help support our next phase of growth and development of the business.”
David Doyle, Chief Financial Officer of Global Switch, added:
“We are delighted to confirm the continuing long-term support of HSBC, Barclays, Credit Suisse and Deutsche Bank, and we welcome Bank of China as a new lender under the RCF. We remain fully committed to maintaining low leverage over the long run and to further consolidating our current strong investment grade credit ratings.”
