MUFG acted as Underwriter and Mandated Lead Arranger in this financing, which followed on from MUFG's role as Underwriter and Mandated Lead Arranger on MasOrange's €6.25 billion refinancing previously.

In this role, MUFG extended its track record of project finance expertise in European fibre as well as demonstrating its balance sheet strength. This deal enables the joint venture to complete its network rollout, consolidating and building upon MasOrange's 48% market share both through deployment and acquisitions.

The Challenge

The key FTTH challenge in Europe is keeping on time with business plans for rolling out fibre infrastructure. Numerous projects have struggled to stick to their original schedules. The Spanish market has over 97% of fibre coverage, making it the most mature fibre market in Europe. Spain's leading position is due to many factors including the relatively inexpensive cost of fibre roll out in Spain and favourable regulatory measures. These measures incentivised the incumbent operator (Telefonica) to roll out fibre across the country relatively quickly whilst promoting competition for other players, such as Vodafone and Orange, without impacting the return incentives for the incumbent operator.

To expand into the European fibre market and secure its assets, the joint venture needed to optimise its long-term financial structure and liquidity position.

A specific challenge for this financing was the dual-project package that required all lenders to commit to both projects – the corporate refinancing of MasOrange and the FTTH joint venture. The structured project finance portion of the deal offers more attractive returns than the corporate refinancing, but, for the former to go ahead, MasOrange required lending banks to subscribe to both. The scale of these transactions meant that months of coordinating and refinement were necessary.

Execution

MUFG recognised the strong potential of the joint venture and leveraged its extensive experience in the European fibre market to propose a financing structure that would keep lending banks subscribed for both projects as the sponsors required. The joint venture mitigates commercial risk through a 28-year MSA that commits the strategic partners, MasOrange and Vodafone Spain, as long-term anchor tenants, ensuring long-term stable cashflows for the project.

MUFG proposed a ring-fenced infrastructure-style loan financing structure and successfully transitioned the complex infrastructure assets into the capital market after the joint venture obtained a preliminary Fitch credit rating as part of its plan to secure a full, verified rating in future.

To take a leading role in providing liquidity to the sponsors in this transaction, MUFG also provided an initial final hold which was double the requested allocation. Furthermore, MUFG deployed a multi-disciplinary, cross-border team, combining its European infrastructure and US private placement expertise, going over and above expectations to achieve a strong result and confidently navigate the credit approval process.

Results

In December 2025, the €4.69 billion financing of the joint venture successfully closed, making it the largest fibre deal in Spain to date that MUFG has worked on. With this financing and credit rating, the fully operational project has an optimised capital structure and has lowered the overall cost of its capital, enabling it to grow its prominent market share and complete its network rollout with an additional 200,000 fibre homes, either by acquisition or deployment.

For MUFG, this transaction underlines the bank's strength and expertise in the European fibre market, possessing the specialist knowledge, balance sheet, and global multi-disciplinary team to achieve large fibre deals and support market growth.