Gateway Fiber Upsizes Credit Facility to $250 Million, Funding Continued Growth in Nationwide Fiber Deployment

Rhea-AI Summary

Gateway Fiber has secured an additional $75 million in debt financing, bringing its total debt financing to $250 million for the year. The funding, arranged by Texas Capital alongside JPMorgan Chase Bank, Third Coast Bank, and CIBC, will support the company's fiber network expansion through 2025 in Missouri, Minnesota, and Massachusetts. With backing from equity sponsor CBRE Investment Management, Gateway Fiber aims to strengthen its position in residential and commercial fiber internet markets while maintaining service quality.

Positive

• Secured $75 million in additional debt financing
• Expanded total debt financing to $250 million
• Support from major financial institutions
• Planned expansion in three key markets through 2025

Negative

• Increasing debt obligations

Insights

Financial Analyst

This $75 million debt financing expansion, bringing the total facility to $250 million, significantly strengthens Gateway Fiber's financial position. The involvement of major financial institutions like JPMorgan Chase, Third Coast Bank and CIBC signals strong institutional confidence in Gateway's business model. The expanded credit facility, combined with CBRE Investment Management's equity backing, provides substantial runway for network expansion across three strategic markets.

The fiber internet sector presents attractive growth opportunities due to increasing demand for high-speed connectivity and federal infrastructure initiatives. Gateway's focus on both residential and commercial markets diversifies revenue streams while the planned expansion through 2025 suggests a well-defined growth trajectory. The improved balance sheet flexibility positions Gateway to capitalize on market opportunities while maintaining service quality.

WRIGHT CITY, Mo.--(BUSINESS WIRE)-- Gateway Fiber, a leading fiber internet provider, is pleased to announce the closing of an incremental $75 million in debt financing. Proceeds from the capital raise will fund continued expansion of Gateway’s fiber network through 2025 in three key markets – Missouri, Minnesota, and Massachusetts.

Gateway has raised a total of $250 million of debt financing this year with Texas Capital acting as the Administrative Agent and Texas Capital Securities as Lead Arranger alongside three joint lead arrangers: JPMorgan Chase Bank, Third Coast Bank, and CIBC. The combination of the expanded credit facility and the ongoing support of Gateway’s equity sponsor, CBRE Investment Management, provides Gateway ample capital to pursue growth.

“We appreciate the tremendous support of Texas Capital, our lenders, and CBRE IM,” said Gateway Fiber CFO Betsy Toney. “With a strong balance sheet and great capital partners, we are confident in our ability to further grow our platform in 2025 and take advantage of opportunities in the residential and commercial fiber internet markets. As we expand, we will continue to invest in our capabilities to maintain outstanding quality of service for our customers.”

About Gateway Fiber

Gateway Fiber is helping communities thrive through a fairer, friendlier, faster internet experience. As data requirements for residences and businesses continue to expand, Gateway is creating a leading, national fiber-to-the-home platform to serve this critical unmet need. Gateway provides faster, more reliable internet with a simple pricing model and industry-leading customer service. For more information, visit gatewayfiber.com.

About Texas Capital

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, is the parent company of Texas Capital Bank (“TCB”). Texas Capital is the collective brand name for TCB and its separate, non-bank affiliates and wholly-owned subsidiaries. Texas Capital is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital has established commercial banking, consumer banking, investment banking and wealth management capabilities. All services are subject to applicable laws, regulations, and service terms. Deposit and lending products and services are offered by TCB. For deposit products, member FDIC. For more information, please visit www.texascapital.com.

Trading in securities and financial instruments, strategic advisory, and other investment banking activities are performed by TCBI Securities, Inc., doing business as Texas Capital Securities. TCBI Securities, Inc. is a member of FINRA and SIPC and has registered with the SEC and other state securities regulators as a broker dealer. TCBI Securities, Inc. is a subsidiary of TCB. All investing involves risks, including the loss of principal. Past performance does not guarantee future results. Securities and other investment products offered by TCBI Securities, Inc. are not FDIC insured, may lose value and are not bank guaranteed.

About CBRE Investment Management

CBRE Investment Management is a leading global real assets investment management firm with $148.3 billion in assets under management* as of September 30, 2024, operating in more than 30 offices and 20 countries around the world. Through its investor-operator culture, the firm seeks to deliver sustainable investment solutions across real assets categories, geographies, risk profiles and execution formats so that its clients, people and communities thrive.

CBRE Investment Management is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE), the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE Investment Management harnesses CBRE’s data and market insights, investment sourcing and other resources for the benefit of its clients. For more information, please visit www.cbreim.com.

*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Investment Management provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Investment Management’s presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers and from its calculation of regulatory assets under management for purposes of certain regulatory filings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241202484350/en/

For more information, press only:

David Workman

PR & Communications Manager

314-265-8974

David.Workman@gatewayfiber.com

Source: Gateway Fiber

FAQ

How much additional debt financing did Gateway Fiber secure in 2023?

Gateway Fiber secured an additional $75 million in debt financing, bringing their total debt financing to $250 million for the year.

Which markets will Gateway Fiber expand into with the new funding?

Gateway Fiber will expand its fiber network in Missouri, Minnesota, and Massachusetts through 2025.

Which banks arranged Gateway Fiber's debt financing?

Texas Capital acted as Administrative Agent and Lead Arranger, alongside JPMorgan Chase Bank, Third Coast Bank, and CIBC as joint lead arrangers.

What is CBRE Investment Management's role in Gateway Fiber's expansion?

CBRE Investment Management serves as Gateway Fiber's equity sponsor, providing additional capital support for the company's growth initiatives.