Seaborn Networks, the operator of the Seabras-1 submarine cable offering service between New York and Sao Paulo, has gained new financing from private equity firm Partners Group.
The firm is providing all of the equity financing for the Sebras-1 project that has a total cost of about $500 million.
Set to become operational by 2017, Seaborn's network already has a large corporate client in Microsoft Corp. (NASDAQ: MSFT), which signed a contract with the service provider in 2014 to become a foundational customer on the Seabras-1 network.
Joining Microsoft is Tata, which recently announced it is also purchasing "significant" capacity on the Seaborn system as part of its plans to improve its offerings to the Latin America region.
Partners joins Natixis, who has been mandated as sole structuring bank, underwriter, lead arranger and COFACE Facility Agent to provide a fully underwritten $270 million in senior secured project debt financing. This debt financing, together with Partners Group's equity investment, represents the full project funding for Seabras-1.
Under the terms of the agreement, Partners Group and Seaborn will be the two equity investors with Seaborn maintain the role of operating the project, managing the build, and operating the system.
"We had run a very competitive process last late winter through the spring and we ended up picking them through that process," said Larry Schwartz, Chairman and CEO of Seaborn, in an interview with FierceTelecom. "When you go through the documentation there's a lot in terms of the negotiations, documentation, the lending side of it and how the equity works with the debt."
While Seabras-1 is a major focus of Seaborn, Schwartz said it's just one of various submarine cable projects the company hopes to launch.
"When we did the marketing launch of Seabras-1, we always said that Seaborn is a unique developer and this is a repeatable model and Seabras-1 was our first project and not our only one," said Schwartz. "The prior rounds we did were development capital rounds that were done at the level of Seaborn Networks and we take institutional equity for each project at the project level."
Brandon Prater, partner and global co-head Private Infrastructure at Partners Group, said in a release that they see how Seabras-1 is a response to the growing demand for global bandwidth.
"The Seabras-1 project is a great fit with Partners Group's strategy of seeking out opportunities to construct the core infrastructure assets of the future," said Prater. "Telecommunications demand between South America and the US - and indeed the rest of the world - is only going to grow in the future and we see huge potential for Seaborn's cable networks."
- see the release
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This article was updated on Jan. 30 with additional information from Seaborn Networks.