Global Switch Affirmed As Stable By Fitch

Global Switch receives favorable review from Fitch on both long-term and short term issuer default ratings

London (I-Newswire) January 14, 2013 - Fitch Ratings has confirmed Global Switch Holdings Ltd's (Global Switch) Long-term Issuer Default Rating (IDR) and senior unsecured rating score at'BBB'. The perspective on the Long-term IDR is Stable. The Short-term IDR has been confirmed at 'F3'. Regardless of a GBP 100m dividend paid out the 1st time in FY11 (to March 2012), Global Switch maintains solid credit metrics, for a leverage on a loan-to-value foundation at about 13%.

Global Switch's financial framework could process a feasible additional decline in global economic activity. Fitch is expecting that at the present ranking level, Global Switch will sustain its financial metrics, specifically an EBIT NIC over 3.0x and leverage under 50% LTV on a maintained basis. At the conclusion of the financial calendar year to 31 March 2012 (FY11), EBIT NIC was 6.1x and LTV was 13%. The financial framework was further more underpinned by the EUR600m 2018 unsecured bond issue in April 2011, which prolonged the group's debt maturity to an average of 6.5 years. Furthermore, remaining shareholder loans adding up to GBP99.6m were capitalised into equity in FY11.

Global Switch is leading the market in the supply of wholesale carrier neutral data centers, that are a lynchpin of contemporary business enterprise. The substantial selection of high-specification data centers valued at GBP3.6bn at FY11 is globally diversified in Europe (e.g. their data centre London) and Asia-Pacific (e.g. their data center Singapore). As opposed to numerous asset companies, Global Switch is money generative (FCF of GBP21m at FY11) and Fitch does not consider that the present advancement programme (GBP32m) will result in a substantial decline in credit metrics.

Global Switch is ranked as a standalone enterprise. It is a private business owned and operated by Aldersgate Investments Ltd, an unlisted organization which is by itself in the end held by Landal Worldwide Corporation, a business which does not generate accounts. Fitch has mirrored this ownership profile in its scores, but points out that the group has the reported long-term objective of listing through an IPO.

At March 2012, Global Switch has shown good liquidity with GBP207m of unrestricted cash accessible as liquidity. Consequently, it has enhanced its RCF facility to GBP300m from GBP225m and expanded the maturity to March 2017. There are no material debt maturities in FY12 and FY13 and only GBP32m of dedicated development expenses as at March 2012. Global Switch also reduces the effect of power supply charge increases by completely re-charging power expenses to its clients and by entering hedging agreements or fixed-term supply deals.