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Global Switch launches inaugural bond issue

April 13, 2011

Global Switch Holdings Limited ("Global Switch"), the leading wholesale carrier neutral data centre owner and operator in Europe and Asia-Pacific and rated BBB by Fitch and Baa3 by Moody's, has launched its inaugural bond transaction.

Proceeds of the transaction will be used to pay off existing inter group indebtedness. The new EUR 600 million benchmark matures on April 18th 2018, pays a coupon of 5.5% and was priced at mid-swaps +207bp, equivalent to DBR 4.00% Jan 2018 +240.7bp.

Joint bookrunners were Barclays Capital, Credit Suisse, Deutsche Bank, HSBC.

John Corcoran, Executive Chairman, Global Switch, said "we were delighted with the strong investor interest shown in Global Switch with the issue being substantially over-subscribed, giving a clear endorsement of our business model and financial standing."


Background to Global Switch

  • Global Switch, established in 1998, is the leading wholesale carrier neutral data centre owner and operator in Europe and Asia-Pacific.
  • Global Switch owns and operates seven data centre campuses, with a second phase of its data centre under construction in its Paris campus (due for completion in September 2011).
  • The data centres are located in the Tier 1 markets of London, Paris, Amsterdam, Frankfurt, Madrid, Singapore and Sydney.
  • The data centres which total 290,000 sq m (3 million sq ft) of gross space have been independently valued by CB Richard Ellis at £3.0 billion as at 31 December 2010 (assuming completion of the second phase of the data centre in Paris).
  • Global Switch's date centres have a 93% occupancy rate and operate with 99.999% uptime reliability.

Execution highlights

  • Global Switch announced its intention to present to pan-European debt investors on 31st March 2011 and conducted a 5-day roadshow visiting London, Paris, Amsterdam, Frankfurt and Edinburgh.
  • Following positive feedback and with stable market conditions Global Switch announced the transaction on the morning of Monday 11th April.
  • At 8.40am, the order book opened with price guidance of mid-swaps +210 to +220bp for a Euro 500 million transaction.
  • With strong investor interest from the outset, the vast majority of orders placed at re-offer.  The book went subject at 9.45am and closed shortly thereafter with orders of over €2.5 billion.
  • The transaction terms were announced at 10.40am.  Due to investor demand the deal was increased to €600 million with the spread set at mid-swaps +207bp, tighter than the initial price guidance.

Summary of the distribution

The final distribution shows a well-diversified investor base both in terms of geographic area and investor types, with a high level of real money participation.

European buyers across many major regions were quick to react to the new deal with the bulk of the distribution being split amongst the United Kingdom (45%), Germany (25%), Scandinavia (12%), Netherlands (8%) and Switzerland (7%).

Distribution by investor type was skewed to real money accounts, with fund managers (75%), insurance/pension funds (10%) and banks (7%) accounting for the placement.

Summary of terms and conditions

Issuer                                 Global Switch Holdings Limited

Issue ratings                        Baa3 / BBB

Pricing date                         11th April 2011

Settlement date                    18th April 2011

Maturity date                       18th April 2018

Size                                     EUR 600,000,000

Coupon                                5.5% annual ACT/ACT

Re-offer spread                   MS +207 bp; DBR 4.0% Jan 2018 +240.7 bp

Re-offer price                      99.631%

Listing                                  London Stock Exchange

Joint bookrunners                 Barclays Capital, Credit Suisse, Deutsche Bank, HSBC



Global Switch

Global Switch is the largest wholesale carrier neutral data centre owner and operator in Europe and Asia-Pacific and is 100% owned by the Reuben brothers (see Established in 1998, the company offers best in class operational performance. Global Switch is a vital strategic partner for customers that require secure and resilient data centre services with scalable capacity and a high level customer service.

The data centre industry has seen and is continuing to experience significant demand for space due to a number of factors including: the rapid growth of the internet especially in terms of increasing numbers of users who are expecting more on demand information and richer content; the increase of cloud computing technology and SaaS (Software as a Service); the rising trend to outsource IT infrastructure and company owned data centres to experienced and secure providers, and the continuing introduction of wide ranging regulation and legislation around the storage of data.

This announcement may not be distributed, directly or indirectly, in or into the United States, Canada, Australia, Japan or any other jurisdiction. This announcement does not constitute or form part of an offer or invitation to sell or issue, or any solicitation of an offer to buy or subscribe for, any securities referred to herein, in the United States or any other jurisdiction nor shall it (or any part of this announcement) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment. Recipients of this announcement who intend to purchase such securities are reminded that any such purchase or subscription must be made solely on the basis of the information contained in any final form prospectus published in connection with any such securities. The transactions described above and the distribution of this announcement and other information in connection with the transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States (as such term is defined in Regulation S under the Securities Act) unless they are registered under the Securities Act or pursuant to an exemption from registration. No public offer of the securities mentioned herein is being made in the United States.

This announcement is not being made, and this announcement has not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended (the "FSMA"). Accordingly, this announcement is not being distributed to, and must not be passed on to, the general public in the United Kingdom. This announcement is being distributed on the basis that each person in the United Kingdom to whom it is made available or at whom it is directed is (a) a person having professional experience in matters relating to investments falling within Article 19(1) of  the Financial Services and Markets Act 2000 (Financial  Promotion) Order 2005 (the "Order") or (b) a person within Article 49 of the Order or of the FSMA (all such persons together being referred to as "relevant persons"). The securities will be made available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with such relevant persons. No other person should rely on it. This document is not intended for distribution to and must not be passed on to any retail client.

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