01 April 2011 – The Times
A £2.5 billion data centre company owned by the Reuben brothers is planning to raise €500 million (£440 million) of debt through the bond markets ahead of a possible floatation.
Global Switch Holdings, which runs nine data centres across Western Europe and the Asia Pacific, is in the final stages of preparing to issue a senior unsecured corporate bond.
John Corcoran, the executive chairman of Global Switch, said that it had not yet determined the timing and pricing of the bond but added: “If the market continues as it is we will register next week with final pricing settled the week after” he said.
He said that the funds raised would be used mostly to repay existing finance that includes a mix of loans from David and Simon Reuben and bank facilities. A small portion would also be used to finance further expansion.
The Reuben brothers, who made most of their money from the Russian aluminium industry and a global property empire, own Global Switch through their unlisted Aldersgate Investment vehicle.
Global Switch was set up 1998 and develops, buys and manages data centres that it lets to tenants on medium to long-term leases. In 2010 it reported total revenues of £221 million with a total assets of £2.55 billion.
The bond issuance comes ahead of a proposed listing of Global Switch that has taked about for a least three years. Earlier plans to float part of the company were hit by the credit crunch.
Mr Corcoran said: “It [the bond issue] certainly prepares us for an initial public offering. Although we have not made a final decision there is a strong possibility there will be an IPO in the next 12 months.”
The rating agency Moody’s, in its first rating for Global Switch, has issued a provisional “stable” rating of Baa3. It said Global Switch had “solid recurring income generated from long-term leases with high occupancy rates of around 93 per cent and a very low tenant churn rate of less than 1 per cent during the calendar year 2010”