DataBank Establishes $725M Financing Facility for Ongoing Expansion
DataBank has established a new $725 million credit facility which it intends to use to finance ongoing and future data center construction projects.
The new capital will fund ongoing expansion in existing markets, including at DataBank campuses in New York, Denver, Minneapolis, Salt Lake City and Dallas. The facility is supported by a bank group of 14 digital infrastructure banks, including TD Securities as the administrative agent and joint lead arranger.
This facility closely follows DataBank’s February issuance of $456 million in secured notes. The issuance qualified as a green bond based on the projects being refinanced meeting specified sustainability criteria for water conservation, carbon emissions reduction, and power usage. DataBank has a goal of being carbon neutral by 2030.
This new credit facility will allow the company to meet the unprecedented AI-driven demand by shortening financing and construction timelines, especially for its recently announced projects in Northern Virginia and Atlanta.
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The former refers to an 85-acre campus in Culpeper, Va., that DataBank acquired in November. The property will support up to 192 MW and 1.4 million gross square feet of data center space. Just a month prior to that, DataBank announced the acquisition of a 95-acre campus in Atlanta for the ATL5 project, capable of supporting another 120 MW and 1 million gross square feet of data center space.
Once fully built out, the facilities at those two campuses would nearly double the 375 MW and 2.7 million square feet across DataBank’s current portfolio of 65-plus facilities in 27 metros.
For this latest financing, TD Securities was the administrative agent, joint lead arranger and joint bookrunner. Citizens Bank, CoBank, Deutsche Bank, First Citizens and Société Générale were joint lead arrangers and joint bookrunners, with JP Morgan, Nomura Securities, RBC Capital Markets and Regions Bank joining as joint lead arrangers. Bank of America and Goldman Sachs were co-documentation agents. Cadence Bank and Preferred Bank also supported the transaction. Jones Day was DataBank’s legal advisor.
Power shortage
Investors are somewhat under-allocated to digital infrastructure, according to a 2024 outlook from CBRE, so that factor—along with underlying demand for new data centers—is likely to drive more institutional investment this year. CBRE predicts a 25 percent increase in new data center construction in 2024, totaling more than 3,000 MW in primary markets.
Power is an issue, however, CBRE reports. “Construction completion timelines have been extended by 24 to 72 months due to power supply delays.”
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