KKR’s German fibre-optic broadband provider Deutsche Glasfaser has secured a new €650 million debt financing package.
The new debt was provided by a group of 10 banks and replaces an existing €225 million facility, at what Deutsche Glasfaser described as “excellent market conditions”. The banking consortium was increased from the initial six participants and included the return of HSH Nordbank, which provided about a quarter of the capital.
The refinancing is expected to boost Deutsche Glasfaser’s €1.5 billion investment plan to spread its fibre optic connections to one million homes and businesses. The five-year old company has already built up a network of 180,000 customers. The firm had less than 100,000 connections at the time of KKR’s initial investment to become 70 percent owner in July 2015.
Deutsche Glasfaser focuses on rural areas and as of last year had established a presence in every German state. It is among the largest providers of fibre to the home technology.
KKR’s investment in the company came through its $3.1 billion Global Infrastructure Investors II fund. The vehicle last year exited from two US water companies for a total of $170 million, generating gross IRRs of 36 percent and 61 percent. The fund was generating a net return of 12.5 percent as at the end of the third quarter last year and is also looking to exit investments in car park business Saba and wind company Acciona, according to UK pension documents.
The moves come amid fundraising for its third infrastructure vehicle, expected to target about $5 billion. This is despite the departure of Jesús Olmos, KKR’s global co-head of infrastructure, at the end of April.