DataBank: DataBank Secures $715m For Data Center Development

Feb 23, 2023 | Posted by Abdul-Rahman Oladimeji

DataBank is collecting $715 million on the market for asset-backed securities (ABS) to develop its data center infrastructure. Kroll Bond Rating Agency has disclosed in a pre-sale report information on the financing. The deal's issuer and co-issuer are represented by DataBank Issuer, LLC and DataBank Co-Issuer, LLC, respectively. Deutsche Bank Securities is the only advisor to the firm and a joint book runner for the transaction. DataBank is a colocation provider with around 65 data centers in over 27 regions. The proceeds will be covered by leasehold interests in 15 enterprise data centers serving multiple customers, representing 49.3% of the transaction's net operating revenue. The remaining 48.6 percent will comprise fee simple ownership interests in 14 properties owned by DataBank. One Atlanta-based data center accounts for the remaining 2.1%. 

After the repayment deadline, which is presently set for 25 February 2028, the DataBank Series 2023-1 contract will adopt a rapid amortization of the principal method. The final due date is February 25, 2053. If the deal's three-month average debt service coverage falls below 1.35x, the company's surplus cash will be deposited into a cash trap reserve until conditions are rectified. DataBank obtained a $1.09 billion asset-backed loan in 2021; repayment is due in the third quarter of 2026. 

In June 2022, DataBank announced a large recapitalization wherein Swiss Lift Asset Management AG and EDF Investment would acquire 27 percent of DataBank from existing investors, including DigitalBridge, for around $1.2 billion in cash. This climbed to $1.5 billion as a result of Northleaf Capital Partners and Ardian's participation, which lifted ownership to 35 percent. In October 2022, the Investment Management Corporation of Ontario (OMCO) announced its plan to invest an additional $450 million in DataBank as part of its recapitalization.