Fitch gives BB+ to Global Cloud notes

Fitch Ratings said it assigned Global Cloud Xchange Ltd. long-term foreign- and local-currency issuer default ratings of B+.

The outlook is stable.

The agency also assigned an expected BB+(EXP) rating and an expected RR1 recovery rating to a proposed senior secured guaranteed notes issue by GCX Ltd., a wholly owned subsidiary of Global Cloud.

The notes are secured by the assets and equity interests of Global Cloud and its key subsidiaries, and guaranteed by Global Cloud and its key operating subsidiaries.

Global Cloud plans to use the proceeds to fully repay its existing $250 million shareholder loan from its immediate parent, Reliance Globalcom BV, ultimately owned by Reliance Communications Ltd., India's fourth-largest telecom service provider by revenue market share.

Part of the proceeds will also be used, together with a potential working capital bank loan, to finance capex related to its submarine cable networks. Once the notes are issued, Global Cloud’s debt would comprise mainly the notes, a proposed working capital loan and capital leases of $50 million.

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