Securitized bonds backed by data center assets are gaining traction with institutional investors, and DataBank is among the operators helping define the market. Institutional Investor examines the rapid growth of data center ABS issuance, which a Charles River analyst report estimates has climbed from $2.6 billion in 2020 to more than $14 billion annually by 2026.
DataBank CFO Kevin Ooley explains that the structure offers investors more predictable cash flow and lower operational risk compared to backing a single asset or tenant. One of DataBank’s securitized master trusts includes roughly 35 assets and approximately 1,700 customers, giving investors broad exposure to a diversified portfolio.
“We are the picks and shovels of the AI world. ABS is a different way for investors to play in an emerging area of critical growth.”
Kevin Ooley, President and Chief Financial Officer, DataBank
Pension funds and insurance companies seeking long-duration assets have been among the most active buyers. Ooley notes the risk and rating-adjusted returns have proven particularly attractive to insurance clients. S&P Global Ratings expects issuance to keep growing as the data center construction pipeline expands, though analysts flag technological obsolescence as a longer-term risk to monitor.
Read the full article at Institutional Investor.
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DataBank has expanded its credit facility to $1.6 billion, accelerating data center construction and supporting over 100MW of new capacity in key U.S. markets. The green financing underscores DataBank’s commitment to sustainability and positions the company to meet growing demand while advancing its goal of carbon neutrality by 2030.
DataBank has raised $1.1 billion in its first hyperscale securitization, marking the industry’s first dual-rated data center ABS by S&P and Moody’s. The oversubscribed issuance expands DataBank’s securitized portfolio to $3.23 billion, funding growth of its U.S. hyperscale and enterprise data center platform.
DataBank has launched a company-wide employee ownership program, making its nearly 1,000 full-time team members part-owners. The initiative aligns with its high-performance culture and will reward employees for the value they help to create.
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