Surf Internet announced the closing of a $407 million fiber asset-backed securitization designed to strengthen the company’s long-term capital structure and accelerate fiber network expansion across the Great Lakes region.
The financing represents the company’s inaugural asset-backed securitization and reflects strong demand from institutional investors for Surf’s growing subscriber base and network assets. The transaction was completed through Surf ABS Issuer LLC, a newly created limited-purpose, bankruptcy-remote subsidiary wholly owned by Surf Internet.
The transaction includes a $332 million offering of secured fiber network revenue term notes along with a $75 million variable funding note facility. The term notes were issued in multiple classes, including Class A-2 Notes rated A-, Class B Notes rated BBB, and Class C Notes that were not rated and were structured at a higher leverage point relative to previous consumer-backed fiber-to-the-home securitizations.
According to the company, the offering was tightly priced compared with sector peers and received oversubscription several times the size of the transaction. Investors included asset managers, insurance accounts, and credit funds.
The proceeds are expected to enhance Surf Internet’s financial flexibility and support continued investment in network expansion, service reliability, and customer experience as the company scales its fiber broadband footprint across underserved communities in the Midwest.
Goldman Sachs served as the sole structuring agent and placement agent for the transaction. Kirkland & Ellis LLP acted as legal counsel to Surf Internet, while Ropes & Gray LLP served as legal counsel to investors and the placement agent.
Surf Internet is a fiber-optic internet provider serving communities across Illinois, Indiana, and Michigan. The company focuses on delivering high-speed connectivity to underserved rural areas and currently employs more than 350 people. Headquartered in Elkhart, Indiana, Surf Internet also operates offices in La Porte, Indiana; Byron Center and Fowlerville, Michigan; and Coal City, Naperville, and Rock Falls, Illinois.
KEY QUOTES:
“This inaugural ABS transaction represents an important milestone in Surf’s continued evolution as a scaled and disciplined super-regional fiber platform. Our strong operating performance and consistent subscriber growth have enabled us to access the capital markets in a way that enhances our financial flexibility and supports long-term value creation. We believe this financing positions Surf to accelerate network expansion while continuing to invest in reliability, service quality, and the overall customer experience.”
Ryan Delack, Chief Financial Officer of Surf Internet
“Surf’s ability to execute this transaction reflects the quality of its network assets and the depth of demand for its services. We believe the company is well-positioned to continue expanding its footprint and delivering reliable connectivity to more communities, supported by a durable and thoughtfully structured capital foundation.”
David Haswell, Director at Bain Capital
