U.S. data center operator Vantage has raised 720 million euros ($821.4 million) — the first of its kind deal in Europe.
The asset-backed securitization (ABS) deal, the first ever euro-denominated with data center assets on the continent, involves four data centers in Germany.
The company said it will be paying on average a 4.3% coupon on the bonds issued through the process.
In an ABS, Vantage raises money by using its data center infrastructure and future revenues from the facilities as collateral.
Vantage said it will use the funds primarily to pay off existing construction loans previously secured for the facilities.
“We believe the ABS market in particular is kind of best suited for our type of asset, which is real estate centric, high credit quality tenants, long term leases, something that is almost perfect for the ABS investor,” Sharif Metwalli, chief financial officer of Vantage Data Centers, told CNBC.
Vantage added that despite the large sum borrowed, the demand from investors exceeded the amount raised.
“So this transaction was actually pretty highly levered, frankly,” Rich Cosgray, senior vice president of global capital markets at Vantage Data Centers told CNBC. “It was higher leverage than our prior transaction and we had some investors that just weren’t comfortable at that leverage level.”
“Yet, despite that, we were basically two and four times oversubscribed on the respective financings, and we were able to tighten pricing pretty meaningfully through the marketing process,” Cosgray added.
The four facilities — two in Berlin and two in Frankfurt — have access to around 55 megawatts of power and “are fully leased to hyperscale customers,” the company said in a statement. The four facilities were valued at more than $1 billion earlier this year.
Last year, Vantage also raised £600 million through the first-ever securitization of a data center in Europe, the Middle East and Asia (EMEA). The deal involved two units from the company’s Cardiff campus with 148 megawatts of electricity power. Across the region, the company has 2,500 megawatts of data center capacity either operational or under development.
The transaction was led by Barclays Bank and Deutsche Bank as joint lead managers and Vantage was represented by the British law firm Clifford Chance.