Global Switch secures credit rating upgrade to BBB+ by Fitch
Global Switch, the leading owner and operator of large scale, carrier neutral data centres in Europe and Asia Pacific, today announced that its credit rating has been upgraded by Fitch to BBB+ from BBB with a stable outlook. The short-term credit rating has also been upgraded to F2 from F3.
This further upgrade to Global Switch's already strong investment grade credit rating is testament to the strength of the Company's established business model and solid financial track record. Fitch highlights the Company's prime portfolio of large scale data centres and conservative capital structure.
The rating agency notes the increased diversification of borrowings and the extension of the company's debt maturity profile following successful GBP £350 million and AUD $100 million unsecured bond issues in the last 12 months.
The upgrade also recognises Global Switch's resilient cash flows supported by its geographically diversified portfolio of assets that benefit from robust, recurring revenue streams generated from long term leases. The strategic positioning of its assets in central, city locations in key telecommunications hubs is noted by Fitch to offer reliable power supplies, high levels of security and a strong operating track record.
Fitch notes that Global Switch is one of the world's leading players with market dominance in a sector with high barriers to entry, driven by positive macro dynamics including the growing volume of global internet traffic, demand for cloud computing, increased bandwidth requirements and an ongoing trend towards outsourcing.
Having recently launched a new data centre in Sydney, Global Switch now owns and operates a portfolio of ten high quality, high specification, carrier neutral data centres. These assets are multi-tenanted and continue to generate stable rental income growth due to high occupancy levels and low levels of customer churn.
Fitch also references the opportunity for Global Switch to further increase its global footprint in growth cities over the short to medium term. Global Switch has a strong development pipeline which includes near term plans for new sites in Hong Kong and Singapore and the further expansion of its new Sydney East data centre. Thereafter, the Company also has medium term plans to expand its existing sites in Europe. Global Switch maintains a low risk strategy of increasing capacity at existing locations in line with market demand.
John Corcoran, Executive Chairman and CEO, Global Switch, said: "The credit rating upgrade from Fitch recognises the continued resilience of Global Switch and its growing and predictable earnings profile. It is testament to the strength of our balance sheet and diversified portfolio of assets and further enhances our competitive advantage. This will enable us to access the deepest and most consistently available pools of liquidity to increase our financial flexibility and to further reduce our cost of capital."
Additional information regarding Global Switch's rating assignment can be found in Fitch Ratings' press release accessible from their website at: www.fitchratings.com. Global Switch also has investment grade credit ratings assigned to it by Moody's and Standard & Poor's.
For further information about Global Switch, please visit the website .
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Jenny Davey / Anjali Unnikrishnan
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About Global Switch
Founded in 1998, Global Switch Holdings Ltd (Global Switch) owns and operates large scale Tier III* data centres that are carrier neutral and multi-tenanted. The Company's focus is on highly resilient, central, low latency, network dense locations in prime, city centre locations and internet hubs close to its customers on the edge of financial and business districts.
Global Switch operates 300,000 square metres (3,200,000 square feet) across ten data centres in seven cities in Europe and Asia Pacific.
The data centre industry is benefitting from attractive market dynamics, characterised by growth in internet usage, combined with the expansion of cloud computing, outsourcing and regulation which have led to significant growth in demand from financial institutions, corporations and governments.
Global Switch is part way through a significant global expansion plan which started with an extension of its Singapore data centre in 2010 and the building of a second data centre on its Paris campus in 2012. Having secured pre-commitments from a number of large multi-national companies, Global Switch launched the first stage of a planned expansion of its Amsterdam data centre and the first stage of Sydney East, its second data centre in Sydney, earlier this year.
The next investments in the expansion programme are planned to be new data centres in Hong Kong and Singapore, where Global Switch is planning a second facility, together with further stages of the newly opened Sydney East data centre. Thereafter, the Company also has medium term plans to expand its existing sites in Europe. Global Switch maintains a low risk strategy of increasing capacity at existing locations in line with market demand.
At financial year-end 31 March 2014, Global Switch reported total revenues of £358.4 million and total assets of £4.4 billion. Since 2007 the company has been wholly owned by Aldersgate Investments Limited, a Reuben Brothers company (see www.reubenbrothers.com), which first acquired an interest in the company in 2004.
Disclaimer The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, these forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. This announcement is for information purposes only and does not constitute an offer to sell or an invitation to subscribe for or a solicitation of an offer to buy or subscribe for any securities.
Note * A Tier III data centre is an industry standard classification for a data centre composed of redundant power and cooling distribution paths, providing a minimum of 99.982% availability.