First-Ever Securitization in Enterprise Data Center Colocation Environment
DALLAS, TEXAS PRNewswire DataBank, a leading provider of enterprise-class colocation, connectivity, and managed services, today announced that it will issue $658 million of secured notes in its first-ever securitization offering.March 12, 2021
The new securitization notes will refinance DataBank's existing credit facility, providing additional capital to support expansion, while substantially reducing financing costs by more than 50%. This securitization and refinancing of previous loans adds more than $200 million in liquidity to DataBank's balance sheet, providing ample funding for general purposes and continued investment in new data center capacity. In addition, the financing locks in rates for five years and provides a powerful launchpad from which the company can 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 center, it favorably compares DataBank's model to that of hyperscale data center operators who have been the only operators to previously conduct this kind securitization."
DataBank's securitization announcement comes on the heels of its acquisition of zColo, the data center assets of Zayo Group Holdings. The resulting footprint effectively positions DataBank as a leading-edge colocation and interconnect platform with 65 data centers 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 Centers. 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. Demand for the securitization was extremely high with 51 unique investors ultimately participating and all tranches significantly oversubscribed.
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 Center ABS.
DataBank is a leading provider of enterprise-class data center, cloud, and interconnection services, offering customers 100% uptime availability of data, applications, and infrastructure. DataBank's managed data center services are anchored in world-class facilities. Our customized technology solutions are designed to help customers effectively manage risk, improve their technology performance and allow them to focus on their core business objectives. DataBank is headquartered in the historic former Federal Reserve Bank Building, in downtown Dallas, TX. For additional information on DataBank locations and services, please visit www.databank.com or call 1(800) 840-7533.
About Digital Colony
Digital Colony is a leading digital infrastructure investment firm with over US$30 billion in assets under management. Launched in 2017 by Digital Bridge and Colony Capital, Digital Colony brings together Digital Bridge's industry, operational and investment expertise, and Colony Capital's (NYSE: CLNY) global operating platform and capital markets access. Digital Colony is a leading investor, owner and operator enabling the next generation of mobile and internet connectivity through investments in mission-critical infrastructure around the globe. The firm is headquartered in Boca Raton with offices in New York, Los Angeles, London and Singapore, and has over 90 investment and operating professionals. For more information, please visit www.digitalcolony.com.
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