DataBank, an enterprise-class colocation, connectivity, and managed services provider, recently announced that it will issue $658 million of secured notes in its first-ever securitization offering.
The new securitization notes will refinance DataBank’s existing credit facility, providing additional capital to support expansion, while substantially reducing financing costs by more than 50%. This securitization and refinancing of previous loans adds more than $200 million in liquidity to DataBank’s balance sheet, providing ample funding for general purposes and continued investment in new data center capacity. In addition, the financing locks in rates for five years and provides a powerful launchpad from which the company can initiate future transactions.
“We are pleased to announce this inaugural securitization in the enterprise colocation setting,” said Kevin Ooley, President and CFO of DataBank. “For DataBank, and the industry, this represents a significant milestone. It provides the structure and flexibility needed to meet the long-term growth and expansion in our colocation, interconnect and cloud platforms. And, as the first ever securitization of a multi-tenant, enterprise-focused data center, it favorably compares DataBank’s model to that of hyperscale data center operators who have been the only operators to previously conduct this kind securitization.”
DataBank’s securitization announcement comes on the heels of its acquisition of zColo, the data center assets of Zayo Group Holdings. The resulting footprint effectively positions DataBank as a leading-edge colocation and interconnect platform with 65 data centers in 29 metro markets and 20 major interconnect locations.
“The strong reception we received on this financing from ABS investors reflects the mission critical nature of DataBank’s edge infrastructure, said Tom Yanagi, Managing Director of Digital Colony. “The $200 million of added liquidity and reduction in borrowing costs by more than 50% drives substantial shareholder value to DataBank shareholders, as we also facilitate the growth of customer edge workloads. Supporting the strategic financing needs of our companies is one of the key pillars of the Digital Colony value-add playbook, so we are pleased to have played a role in the first-of-its-kind securitization financing of Edge Data Centers. I want to congratulate Raul, Kevin and the entire DataBank team.”
The Kroll Bond Rating Agency provided an initial rating of the $658 million secured notes. Demand for the securitization was extremely high with 51 unique investors ultimately participating and all tranches significantly oversubscribed.
Deutsche Bank Securities Inc. acted as Sole Structuring Advisor and as a Joint Active Bookrunning Manager and Guggenheim Securities, LLC acted as a Joint Active Bookrunning Manager in this first time Colocation Data Center ABS.
Databank | Digital Colony | edge data center | funding | investment | regional data center