Wavve Secures $35 Million in Financing

By Rich Miller
CarrierHotels News Staff

Jan. 4, 2000 -- Wavve Telecommunications, Inc. has secured $35 million in financing that will allow the company to meet its current expenses and complete the construction of its Sacramento data center, Wavve announced today.
. The financing from Capital Lease Funding (CLF), a New York-based real estate investor, will allow Wavve to purchase the building housing its Sacramento II Internet Data Center and complete construction on the site.
On Dec. 1 Wavve said that growing losses had created "substantial doubt" about its ability to remain in business, and that it would seek funding from real estate investment trusts.
"We are obviously thrilled about closing this unique financing arrangement," said Bob Ingraham, Wavve's President and COO. "Not only does it provide us with immediate cash, it does so without diluting our shareholder's equity.
"This financing represents a dramatic reduction in our on-going capital requirements and is sufficient to settle all current corporate payables, as well as sustain the company's operations and development efforts," said Ingraham. "Moreover, it allows us to focus on other important areas of our business including expansion of our current product line and marketing and sales efforts."
Wavve secured the deal by restructuring its existing contract with its anchor tenant in Sacramento, which agreed to exercise its option to lease an additional 10,000 square feet before December 31, 2001. In a press release, Wavve said it will "retain all revenue directly related to Data Center services and continue to manage all data center facilities and operations."
The transaction was finalized on Dec. 29, and will be reflected in Wavve's fourth quarter 2000 financial statements. Wavve has already received a portion of the $35 million, the company said.
Capital Lease Funding specializes in providing financing for properties net leased to credit tenants. The company has financed in excess of $1.5 billion of credit tenant loans.
"We chose to work with Wavve because we are impressed by its business plan and its robust product offering as well as its ability to secure credit-rated tenants," said Bill Pollert, Capital Lease Funding's president and CEO. "We look forward to working with Wavve's management team to explore additional opportunities to fund future Data Center facilities.''
Wavve is a provider of colocation, network connectivity, Internet and managed services. Ingraham said he foresess more net lease deals being used to fund infrastructure developers.
"With capital so scarce in our industry today, we believe that this innovative funding structure will become the benchmark in the industry as an alternative to fund and offset data center construction expenditures,'' said Ingraham.