Vantage Data Centers Raises $1.3B via Securities, Cuts Capital Cost

The developer who pioneered securitization in the data center industry says the latest deal reduces its capital cost by 30 percent.

Yevgeniy Sverdlik

October 6, 2020

1 Min Read
The Etix campus in Offenbach, Germany, now part of the Vantage portfolio
The Etix campus in Offenbach, Germany, now part of the Vantage portfolioVantage Data Centers

Vantage Data Centers, which develops massive data center campuses and leases the buildings out wholesale to some of the world’s largest companies, such as Facebook, has raised $1.3 billion in securitized debt, the company said Tuesday.

It managed to borrow the money at such a low rate that it will be able to refinance its outstanding debt and reduce the overall cost of capital by about “30 percent on average across its capital structure and extend debt maturities,” the company said.

Vantage, which has built and acquired data center campuses in North America and Europe, said it will use most of the proceeds for refinancing, but a portion will fund more data center construction in its existing North America locations.

“The current market environment proved extremely advantageous for Vantage and our investors to lower our capital costs, extend maturities and provide funding for growth opportunities,” Sharif Metwalli, Vantage’s CFO, said in a statement. “Having access to capital at today’s attractive market rates gives us the ability to redeploy the realized savings with additional investments to grow the business across key regions throughout North America, where our customers’ data center requirements continue to increase.”

Vantage pioneered the use of securitization as a vehicle for funding growth in the data center provider industry, raising about $1.12 billion this way in 2018. Traditionally, companies in the space have been funded by private equity, with the biggest ones eventually going public.

Related:US Data Center Operators Have Financing Advantages Over EU Counterparts

Another US hyperscale data center developer, Stack Infrastructure, announced it had raised $325 million in securitized debt last month.

In July a group of investors led by its existing investor Colony Capital bought a $1.2 billion stake in Vantage.

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