Cogent Communications (CCOI) J.P. Morgan 2026 Global Leveraged Finance Conference summary

Strategic recapitalization and debt structure changes

• Announced a four-step restructuring to refinance $750 million of unsecured debt with secured debt, enhancing collateral quality and reducing leverage.

• Moved $569 million of capital leases off the main balance sheet, converting them to operating leases and reducing senior debt at the group level.

• Dividend reduced by 98% and equity buybacks paused until leverage falls to four times, currently at 6.6 times.

• Proceeds from a pending sale of 10 data centers (LOI signed) will be injected into the borrower group to further strengthen credit, though this is not required for the refinancing.

• The new $750 million secured debt will sit pari passu with existing secured debt, with maturities extended to ensure adequate runway.

Asset management and operational transformation

• Acquired Sprint’s network and assets, including 20,200 route miles of dark fiber and 482 buildings, for $1, with a $700 million subsidy to offset negative EBITDA.

• Repurposed acquired assets for a new wavelength network and data centers, mitigating losses by ring-fencing liabilities and leveraging asset-backed securitization.

• Data center sale process is competitive, with multiple LOIs and a current buyer conducting due diligence on 10 facilities; 24 large data centers identified as superfluous, with plans to sell remaining assets.

• Converted 125 facilities for new uses, with smaller sites targeted for traditional colocation and larger sites for strategic sale.

Financial performance and growth outlook

• EBITDA margins expanded by 800 basis points last year, with expectations of 200 basis points annual expansion over the next several years.

• Underlying EBITDA grew by $70 million, and the business returned to top-line growth after purging low-margin Sprint revenue.

• Organic business grew 27% over nine quarters, while acquired Sprint revenue shrank 64% but has now stabilized.

• Targeting 6%-8% annual top-line growth and maintaining strong liquidity and debt maturity management.