Vantage Data Centers has raised $1.125 billion to fund expansion through what the company said was the data center industry’s first financing through securitization, or issuing securities for a specific subset of assets that have similar characteristics.
The notes Vantage issued in the transaction received Standard & Poors’ A- investment-grade rating – rare in the data center provider space. The notes are for Vantage data centers that are already occupied, not land or building assets that are still under development, as the company’s CEO Sureel Choksi explained to Data Center Frontier. Issuing notes on these stable income-producing assets was key to achieving investment-grade rating and the resulting low cost of capital – a major competitive advantage in the capital-intensive industry.
Vantage will use the new funds to refinance its credit facility. Combined with equity commitments by its owner Digital Bridge, the funds will make about $500 available to pay for expansion in existing and new markets, the company said.
Vantage already has a massive data center campus in Santa Clara, California, and two years ago acquired land to build another one there. It’s also building large in Northern Virginia. Its third location is in Quincy, Washington.