US data center operator Vantage has raised 720 million euros ($821.4 million), the first deal in Europe.
The asset-backed securitization transaction (ABS) deal is the first-ever euro-timed data center asset on the continent, involving four data centers in Germany.
The company said it will pay an average of 4.3% of the coupons on bonds issued through the process.
In ABS, Vantage raises funds by using its data center infrastructure and future revenue from facilities as collateral.
Vantage said it will use the funds primarily to repay existing construction loans previously obtained for the facility.
“We believe the ABS market is particularly suitable for our asset type, which is real estate-centric, high-credit quality tenants, long-term leased assets that are almost perfect for ABS investors,” Sharif Metwalli, chief financial officer at Vanta Data Centers.
Vantage added that despite the large amount borrowed, investors demanded more than the amount raised.
“So, frankly, the deal is actually highly leveraged,” Vantage Data Centers senior vice president of global capital markets, told CNBC. “It’s higher than our previous deals, and we have some investors who are not satisfied with that leverage level.”
“Nevertheless, we basically oversubscribed on their respective financings twice and four times, and we were able to tighten pricing very meaningfully through the marketing process,” Cosgray added.
The four facilities – two in Berlin, two in Frankfurt, can use about 55 MW of power and are “fully rented to high-end customers,” the company said in a statement. Earlier this year, the four facilities were worth more than $1 billion.
Last year, Vantage also raised £600 million through its first securitization of data centers in Europe, the Middle East and Asia (EMEA). The deal involves two units on the company’s Cardiff campus, which has 148 megawatts of electricity. Throughout the region, the company has 2500 MW of data center capacity or is in development.
The deal was led by Barclays and Deutsche Bank as co-chief managers, while Vantage was represented by British law firm Clifford Chance.
