Summary

  • Cogent's executed IPv4 note indenture requires a valuation if less than 50% of the contributed address pool is leased on a determination date. Majority noteholders can then direct a conditional sale process.
  • Cogent's June 2026 Form 10-Q says it owns about 38 million IPv4 addresses company-wide and leases 15.2 million. The arithmetic is about 40%; the contract measures an issuer-specific pool whose counts the filing does not give.
  • The 2025 amendment raised the Class A leverage ceiling for additional notes from 6.10x to 7.25x, while retaining other debt-service, rating and collateral conditions. Financing room and creditor control expanded in different directions.

The denominator belongs to the bond

Forty per cent is an excellent number for a bad headline. Divide Cogent's 15.2 million leased addresses by its roughly 38 million owned addresses and the result sits below the bond's 50% line. The arithmetic works. The comparison does not. The two figures cover Cogent's wider business; the contract tests only the IPv4 addresses contributed to Cogent IPv4 LLC, the special-purpose issuer. The indenture expressly allows the parent and other affiliates to hold addresses outside that collateral pool. No public issuer-pool leased count or issuer-pool total accompanies the company-wide numbers in the June filing.

The distinction determines who has a hand on the asset. Under Section 2.14 of the filed indenture, an issuer-pool utilization rate below 50% on a determination date requires a valuation report. After the trustee receives it, holders of more than half the outstanding note principal have 60 days to direct an offer to Cogent as manager or a process seeking third-party buyers. Cogent gets a first-refusal right on a qualifying outside offer. A sale below the outstanding note principal faces an additional debt-service coverage test. Proceeds pay down the notes. These are steps, votes and conditions, not a trapdoor that opens when a spreadsheet reaches 49.9%.

The actual percentage for the pledged pool is the missing fact. It would take the manager report's contributed-address total and leased-address count, dated to the same determination, to say whether a valuation was required. A valuation report and holder direction would then show whether the lender sale option moved beyond paper. Until those documents appear, the publicly calculable 40% belongs to a different ledger.

The extra turn of the debt screw

The address pool already supports two series of secured revenue notes. The first raised $206 million in 2024 at 7.924%, with an anticipated repayment date in May 2029. The second added $174.4 million in April 2025 at 6.646%, with an anticipated repayment date in April 2030. Those are original principal amounts; Cogent reported a $372.6 million net carrying balance for secured IPv4 notes at 30 June 2026 after unamortized costs. The issuer pledges addresses, lease contracts and receivables. The parent is not the general guarantor of these obligations; the specified IPv4 holding company supplies the guarantee and equity collateral.

The April 2025 filing records a negotiated change. Holders representing more than 50% of the earlier series' voting rights approved a higher Class A leverage test for further notes: 7.25 times instead of 6.10. The contract still requires at least 1.85 times senior debt-service coverage, rating conditions and other checks. The new ceiling permits more borrowing under a specified test; it supplies no evidence that Cogent has borrowed to that ceiling. The amendment also changed conditions for swapping or disposing of addresses in the pledged pool. Financing flexibility came with a precise collateral map, not a blank cheque.

Cash has its own lock. Of the 2025 note proceeds, $72.6 million was initially restricted. Cogent said $26.9 million was released during 2025 and $14.2 million in the first half of 2026 as monthly leverage and coverage ratios improved. Its June filing gave the issuer until October 2026 to meet the tests for the remaining funds; any balance left locked then would repay the 2025 notes. The published June figures do not settle that October result. The next filing needs to show whether cash reached the parent or returned to creditors.

The indenture also distinguishes weak coverage from weak leasing. A debt-service coverage failure can cause rapid amortization. Low issuer-pool utilization can push collections toward repayment and, at the 50% threshold, start the valuation and holder-decision sequence. Both put cash and addresses under a more restrictive order of claims, but they are different events. Cogent sold ten data-centre properties in June; that separate transaction has its own restricted-proceeds story. The IPv4 bargain is about who can direct the address collateral when lease income no longer carries its side of the deal.