Hosting operator Vantage Data Centers has raised US$530 million in securitised notes to fuel further portfolio expansion.
The notes are a five-year issuance (Series 2021-1) and are rated A- by Standard & Poor’s. They generally rank pari-passu with Vantage’s existing outstanding notes.
The transaction was supported by DigitalBridge Investment Management, the investment management arm of Vantage’s majority stakeholder, DigitalBridge Group, Inc. (NYSE: DBRG).
The proceeds from this transaction are primarily being used to refinance the company’s Variable Funding Note (VFN) facility, which was used to facilitate the CA22 transaction in September 2021, as well as to fund general corporate needs.
Sharif Metwalli, Vantage’s chief financial officer, said: “This transaction marks Vantage’s seventh securitisation financing since 2018 when we pioneered the use of this approach in the data centre sector.
“We are faced with increasing demand for premiere hyperscale data centres that can be delivered quickly and sustainably. Our strong financial position enables us to continue our global expansion with favourable interest rates that not only reduce our overall costs but further strengthen our competitive position in the market.”
Marc Ganzi, president and chief executive officer of DigitalBridge, said: “We are proud of our ability to execute unprecedented financings for our portfolio companies, and we applaud the Vantage team for this milestone.
“Not only does the transaction spread represent Vantage’s tightest yet, it is also a meaningful improvement in spread compared to the company’s October 2020 offering, which was the lowest coupon financing issued in the data centre sector.
“The outsized demand for this financing is a testament to the expertise of the Vantage and DigitalBridge teams and the value-creation opportunities ahead, and we are excited to continue working together to build a best-in-class global digital infrastructure platform.”
Vantage has been on an expansion spree since a consortium of Digital Bridge, PSP Investments and TIAA Investments acquired the business in March 2017.
At the time, the company managed a portfolio of four campuses in Silicon Valley in California, and Quincy in Washington, which amounted to a total IT operational load of 57MW.
Today, Vantage operates US campuses in Virginia, Arizona, Washington and California. Additionally, it services customers in Montreal and Quebec City in Canada.
Its global expansion has seen the business invest $2 billion in establishing a footprint in Europe covering Berlin, Frankfurt, Milan, Warsaw, Cardiff (through the acquisition of NGD), and Zurich.
In September, Vantage broke into Asia with $1.5 billion in investor-led acquisitions, taking over assets from Agile Data Centers and PCCW’s Data Center Business (PCCW DC) in Tokyo, Osaka, Melbourne, Hong Kong and Kuala Lumpur.
More recently, the company broke ground in Africa where it is building its first data centre in Johannesburg, South Africa, representing an investment of $1 billion.