New research from KBRA, a prominent credit rating agency, delves into the potential for European fibre optic infrastructure to be integrated into an Asset-Backed Securities (ABS) framework. The study, titled 'European Fibre ABS: From Build-out to Securitisation', offers an in-depth analysis of how these crucial digital assets could be financed through structured financial products, drawing parallels with the more mature US market.
The report highlights the US fibre ABS market as the clearest benchmark for understanding the securitisation of fibre assets. By May 2026, KBRA had already rated approximately $29.9 billion of US fibre ABS, demonstrating a significant and established market for this type of financing across the Atlantic. This precedent offers valuable insights into the structuring, performance, and investor appetite for securitised fibre assets.
While the US provides a strong securitisation reference, KBRA's research also meticulously examines existing European fibre financings. This analysis focuses on understanding the operational performance and the diverse contractual revenue models prevalent across various European countries. Such context is vital for tailoring an ABS framework that accurately reflects the unique characteristics and risks associated with European fibre infrastructure projects.
The move towards securitisation for European fibre assets comes as countries across the continent continue their ambitious build-out programmes to enhance digital connectivity. These large-scale infrastructure projects often require substantial capital investment, and ABS can provide an alternative or supplementary financing mechanism, potentially attracting a broader range of institutional investors seeking stable, long-term returns.
Securitisation could unlock significant capital for further fibre expansion, which is critical for supporting economic growth, remote working, and the increasing demand for high-speed internet. By converting future revenue streams from fibre networks into tradable securities, developers and operators may gain greater flexibility in funding their ongoing and future projects.
Source: KBRA, City A.M.