Over the past 10 years, XpFibre, one of France’s leading independent fibre optics infrastructure providers, has deployed fibre infrastructure in its service areas across the territory. BNP Paribas designed an innovative financing structure that was aligned with the brownfield and utility like nature of the business in a sector where no reference transaction had existed before this one. The financing achieved the targeted investment-grade credit ratings enabling international mobilisation of investors.
Setting up a precedent in the fibre sector
After a successful journey of implementing fibre infrastructure throughout France, XpFibre secured a EUR5.8bn refinancing package from mixed sources, including senior secured bank facilities ranking pari passu to various institutional term loan tranches. The financing featured a EUR1.5bn bridge to Private Placement, with EUR1.2bn already placed in an inaugural US Private Placement (USPP) issuance for long-term, fixed-rate funding. The remaining EUR4.3bn debt was underwritten by lead banks, of which around EUR1bn went to Cornerstone lenders.
This refinancing package set a precedent for how fundings in the fibre sector can be structured. It balanced different maturity buckets for debt provided by various creditor classes at a highly competitive cost of capital.
“Our ability to help achieve these objectives demonstrated our position as a trusted partner for transformative deals in European infrastructure. It also underscored not just BNP Paribas’ technical capabilities but also our commitment to supporting clients through complex, high-profile financings, which is something we believe will be a blueprint example for these types of maturing fibre businesses in Europe,” explained Andras Kranicz, Managing Director and Head of Infrastructure Finance Europe at BNP Paribas, in an exclusive interview with TMT Finance.
❝ Our ability to help achieve these objectives demonstrated our position as a trusted partner for transformative deals in European infrastructure. ❞
A key aspect of this successful transaction was achieving investment-grade ratings from leading agencies, unlocking new liquidity pools and diversifying funding sources away from traditional bank lenders.
The main challenge was to design a financing structure aligned with XpFibre’s mature and cashflow-generating nature, in a sector where no reference trade existed. This required creating a covenanted, secured, and fully ringfenced financing structure in line with rating agencies’ requirements, achieving an investment-grade rated multi-creditor structured finance platform.
❝ It has been a privilege to have been given the opportunity of partnering XpFibre and its shareholders in this journey and working through the challenges of almost 18 months of intense work. ❞
BNP Paribas leveraged its understanding of the fibre sector and XpFibre’s lifecycle, offering a fully integrated service including capital structuring, rating advisory, loan underwriting, hedging solutions, private placement agency services, and ESG expertise.
A strategic dual role
BNP Paribas played a dual role in this unprecedented deal, as both capital structuring adviser and a USPP agent, utilising the depth of experience accumulated in its market leading infrastructure franchise and in particular European financing schemes implemented in the the fibre sector. The Bank provided integrated solutions that aligned the clients’ strategic needs with market conditions by combining financing and structuring practices used in other infrastructure sub-sectors with XpFibre’s specifics.
BNP Paribas’ expertise supported the creation of this successful refinancing structure and the achievement of investment-grade ratings. The Group’s dual role facilitated real-time insights into market dynamics and investor expectations, refining the capital structure and ratings strategy.
At the time, this transaction represented the largest European fibre netco credit issuance ever placed in the USPP market and set a precedent for diversification in funding sources. Beyond being strategically aligned with BNP Paribas’ objective of supporting the digital infrastructure sector, the XpFibre refinancing transaction demonstrates the Bank’s technical capabilities and dedication to supporting its clients through complex financings and underscores its position as a trusted and market leading partner in European infrastructure financing.
