DataBank to kick off inaugural securitization offering with $658m secure notes issuance
Colocation provider DataBank will issue $658 million of secured notes in its first-ever securitization offering.
The new securitization notes will refinance DataBank's existing credit facility and will provide additional capital to support expansion while reducing financing costs by more than 50%.
The company said this securitization and refinancing of previous loans adds more than $200 million in liquidity to DataBank's balance sheet.
This will provide funding for general purposes and continued investment in new data centre capacity. In addition, the financing locks in rates for five years and provides a launchpad for the company to 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 centre, it favourably compares DataBank's model to that of hyperscale data centre operators who have been the only operators to previously conduct this kind securitization."
DataBank's securitization announcement comes off the back of its acquisition of zColo, the data centre assets of Zayo Group Holdings.
The resulting footprint positions DataBank as a key edge colocation and interconnect platform, according to the company, with 65 data centres 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 Centres. 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.
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 Centre ABS.