Switch & Data Gets Funding for NJ Data Center
Switch and Data (SDXC) said Monday that it lined up $157.5 million in debt financing from a syndicate of banks led by RBC Capital Markets and GE Corporate Lending. The financing fully funds Switch and Data’s expansion, including its lease of a major data center in North Bergen, New Jersey.
The 163,500 square foot New Jersey data center is seen as key to the company’s growth. Delays in finalizing the funding for the project brought questions from securities analysts in the company’s quarterly conference call Feb. 20. But Switch and Data executives said the debt financing remained on track, despite the recent challenges in the credit markets.
“We believe the completion of this credit facility in today’s environment speaks volumes to the strength of the demand for our services and the critical role our Internet exchanges play in the expanding Internet economy,” said Keith Olsen, CEO and President of Switch and Data. “This financing will build the capacity to continue to fuel our business momentum.”
RBC Capital Markets and GE Corporate Lending were the joint lead arrangers and CIT was among the lenders that participated in the bank syndicate. The terms of the agreement provide Switch and Data with a $120 million term loan, a $22.5 million delayed draw term loan, which is funded at the option of Switch and Data no later than March 27, 2009, and a $15.0 million revolving loan. The $120 million term loan was funded last Friday, with the proceeds used to retire the $38.2 balance under Switch and Data’s previous credit facility. The loans will be used to fund Switch and Data’s expansion plans.
Switch and Data operates a network of neutral colocation facilities, with 34 data centers in 23 markets serving more than 800 customers. The company’s PAIX business provides peering and Internet exchange services. Switch & Data went public Feb. 8 with an IPO that raised about $200 million.