Cogent Offers $206 Million in Secured Notes Backed by IPv4

Cogent Communications Holdings, Inc. (NASDAQ: CCOI), a leading global internet service provider, announced on April 25th 2024 a groundbreaking securitization offering. This move will see Cogent utilizing a significant portion of its IPv4 address space to issue up to $206,000,000 in securitized notes.

The offering, consisting of senior secured notes, will be supported primarily by the monetizing IPv4 addresses that Cogent owns directly. The exact terms, including interest rates and principal repayment periods, are yet to be finalized.

Cogent’s innovative use of IPv4 address securitization capitalizes on the finite availability and increased demand for these addresses, given their central role in modern internet infrastructure. By leveraging these valuable assets, the company aims to unlock significant financial value.

The notes will be issued via a newly established special-purpose entity (SPE). This entity will hold a portion of Cogent’s IPv4 address blocks as collateral, providing security to investors while generating attractive financing for Cogent. The SPE will also secure the notes with revenues derived from leasing these IPv4 addresses.

The offering’s success will depend on favorable market conditions and the finalization of the terms. Cogent expects to use the proceeds for general corporate purposes, including funding growth initiatives, refinancing existing debt, and other capital expenditures.

Goldman Sachs and Barclays are serving as joint book-running managers for the offering, while Cogent remains confident that this innovative securitization approach will strengthen its financial position and accelerate growth.