DataBank launches its first securitization offer
March 15, 2021 | Abigail Opiah
Colocation provider DataBank will issue $ 658 million in secured banknotes as part of its first-ever securitization offering.
The new securitization bonds will refinance DataBank’s existing credit facility and provide additional capital to support expansion while reducing funding costs by more than 50%.
The company said this securitization and refinancing of past loans adds more than $ 200 million in liquidity to DataBank’s balance sheet.
This will provide general purpose funding and continued investment in new data center capacity. In addition, the financing locks in rates for five years and provides a launching pad for the company to initiate future transactions.
“We are delighted to announce this inaugural securitization as part of corporate colocation,” said Kevin Ooley, President and Chief Financial Officer of DataBank.
“For DataBank and the industry, this represents an important step. It provides the structure and flexibility to meet the long-term growth and expansion of our colocation, interconnection and cloud platforms. And, as the very first securitization of a tenant-driven, enterprise-centric multi-data center, it compares the DataBank model favorably to that of hyperscale data center operators who have been the only operators to previously lead this. type of security. “
DataBank’s securitization announcement follows its acquisition of zColo, the data center assets of Zayo Group Holdings.
The resulting footprint positions DataBank as a key colocation and interconnection platform, according to the company, with 65 data centers in 29 metro markets and 20 major interconnection sites.
“The very positive reception we have given to this funding from ABS investors reflects the critical nature of DataBank’s edge infrastructure,” said Tom Yanagi, Managing Director of Digital Colony.
“The $ 200 million in additional liquidity and the reduction in borrowing costs by more than 50% generate substantial shareholder value for DataBank shareholders, as we also facilitate the growth of workloads at the customer periphery.
“Supporting the strategic financing needs of our businesses is one of the key pillars of Digital Colony’s added value. So we’re thrilled to have played a role in the first Edge data center securitization funding. I want to congratulate Raul, Kevin and the entire DataBank team. “
The Kroll Bond rating agency assigned an initial rating to the secured notes of $ 658 million.
Deutsche Bank Securities Inc. acted as sole structuring advisor and as co-active book manager and Guggenheim Securities, LLC acted as active book co-manager in this first data center colocation ABS .