Uniti Group prices $1.1bn Kinetic fiber securitisation notes
Uniti Group has priced a $1.14 billion securitisation of residential fiber network assets through Kinetic ABS Issuer LLC, a bankruptcy-remote subsidiary of the NASDAQ-listed fiber provider.
The offering closes on 15 July 2026 and marks one of the larger asset-backed transactions in the US fiber sector so far this year.
The notes are structured across three tranches: $805.2 million of Class A-2 notes carrying a 5.834% coupon, $134.2 million of Class B notes at 6.224%, and $201.3 million of Class C notes at 7.536%, producing a weighted average coupon of approximately 6.18%. All three tranches carry an anticipated repayment date in June 2033. The underlying collateral comprises residential fiber network assets and associated customer agreements across ten states — Texas, Arkansas, Kentucky, Ohio, Georgia, Iowa, Alabama, Florida, North Carolina and Oklahoma.
Uniti said proceeds will be directed towards general corporate purposes, which may include success-based capital expenditure and/or repayment of existing debt. The company did not quantify the proportion earmarked for each use.
Deal structure
The issuing entity and its direct parent and subsidiaries are designated as unrestricted subsidiaries under Uniti's existing credit agreement and its outstanding senior-note indentures, ring-fencing the securitisation vehicle from the broader group's debt covenants. The existing liquidity funding note facility attached to the structure will be upsized and its maturity extended to match the new notes' final repayment profile. The securities were offered exclusively to qualified institutional buyers under Rule 144A and to non-US investors under Regulation S, with no registered offering contemplated.
Market context
Fiber securitisation has become an established funding route for US broadband operators seeking cheaper long-tenor capital than conventional high-yield bonds can provide. Infrastructure-focused ABS structures allow issuers to isolate revenue-generating assets — subscriber contracts underpinned by recurring monthly fees — and attract institutional fixed-income investors who might not otherwise hold telecom credit. Peer transactions from operators including Frontier Communications and others in the residential fiber build-out wave have demonstrated investor appetite at comparable coupon levels, though spread outcomes remain sensitive to subscriber churn assumptions and competitive overbuilding risk in each market footprint.
Uniti is simultaneously navigating a pending merger with Windstream, a transaction that introduces integration execution risk the company itself flags as a material uncertainty. Completion of a securitisation of this scale ahead of that close suggests the company is actively managing its balance sheet to reduce the cost of financing what it describes as "success-based" capex — broadly, fibre-to-the-premises passings that are built to order rather than speculatively.
The ten-state collateral pool spans markets with varying competitive dynamics. Rural and semi-rural footprints in Arkansas and Iowa face different overbuilding risk profiles compared with faster-growing metro-adjacent markets in Texas, Florida and North Carolina. Rating-agency criteria for fiber ABS typically stress penetration rates and average revenue per user; Uniti did not disclose subscriber metrics or penetration figures in its pricing announcement.
The June 2033 repayment horizon positions the notes within a period when US fiber networks are expected to have largely completed initial build phases and transitioned to operational cash-flow maturity, a characteristic that supports the investment-grade-proximate pricing of the senior tranche.