STACK INFRASTRUCTURE: Stack Infrastructure Will Raise $250 Million to Expand Its Data Center

Mar 08, 2023 | Posted by Abdul-Rahman Oladimeji

Stack Infrastructure plans to seek $250 million for data center expansion. The Stack Infrastructure Issuer will provide the funding, 2023-1, through the securitization of income connected to lease obligations and electrical capacity at 8 wholesale data centers in seven U.S. states. S&P Global Ratings reports that the data centers are in New Albany, Ohio; Atlanta, Georgia; Portland, Oregon; Dallas, Texas; San Jose, Chicago, Illinois; California; and Sterling, Virginia. The data centers have a combined capacity of 138MW and 1.917 million square feet. It is predicted that the equity extraction will be finished by the third week of March. The sites have a weighted average outstanding contract length of 6.6 years and are funded via triple-net leases in which the tenant is liable for rent, taxes, insurance, and power costs. It is projected that the loan will mature in five years, with a maximum term of 25 years. 

Per the report, Stack will use a portion of the funds to repay a fraction of the remaining balance on the 2019-1 notes, while the remainder will be used for "other overall corporate purposes," such as expanding the company's data facility footprint through the funding of turnkey and powered shell facilities. If the company's average amortization debt service coverage ratio (DSCR) for the past three months reaches 1.30, a cash trap will be activated. This is Stack Infrastructure's sixth loan from the master trust, and the collateral will be shared with the existing 2019-1, 2019-2, 2020-1, and 2021-1 notes. The 2019-1 series raised $850 million, while the 2019-2 series raised $225 million. In its 2020-1 series, the company secured an additional $325 million in debt financing, and in its 2021-1 series, an additional $400 million. The sum of these five rounds is $2.05 billion.