DataBank, a prominent provider of enterprise-class edge colocation, interconnection, and managed cloud services, unveiled a substantial financing endeavor of USD 725 million on April 9, 2024. The facility aims to fuel its ongoing and forthcoming data center construction ventures.
This move comes in response to the burgeoning demand for data center capacity, primarily propelled by the escalating workload demands of Artificial Intelligence (AI) applications. According to BIS Research, the global carbon neutral data center market was valued at $5.02 billion in 2021 and is projected to reach $16.53 billion in 2027, growing at a CAGR of 22.19% during the forecast period 2022-2027.
The newly secured credit facility is set to facilitate expansion initiatives across DataBank's existing markets, including its New York, Denver, Minneapolis, Salt Lake City, and Dallas campuses. With the support of a robust bank consortium of 14 leading digital infrastructure banks, spearheaded by TD Securities, serving as the Administrative Agent and Joint Lead Arranger, DataBank aims to expedite its construction projects to cater to the surging demand effectively.
In a press release, Kevin Ooley, DataBank's President and Chief Financial Officer, emphasized the imperative role of this financing in meeting the unprecedented demand spurred by new and emerging AI applications. Ooley highlighted the significance of this credit facility in accelerating financing and construction timelines across all campuses, particularly as DataBank gears up its activities in the newly announced campuses in Northern Virginia and Atlanta.
The expansion drive gained momentum in November 2023 when DataBank disclosed its acquisition of an expansive 85-acre campus in Culpeper, VA, slated to accommodate up to 192MW and 1.4M gross square feet of data center space. This strategic move was closely followed by the acquisition of a sprawling 95-acre campus in Atlanta, capable of supporting an additional 120MW and 1M gross square feet of data center space, announced just a month prior.
Upon full deployment, these facilities are poised to substantially augment DataBank's portfolio, encompassing 65+ facilities across 27 metros, boasting a cumulative capacity of 375MW and 2.7M square feet.
The financing marks DataBank's second foray into green financing following its Green Bond issuance in February 2024.
To qualify for a green loan, the financed facilities must meet stringent sustainability criteria, encompassing water conservation, carbon emissions reduction, and maintaining a low Power Usage Effectiveness (PUE). These initiatives align with DataBank's goal of achieving net-zero scope 1 and 2 emissions by 2030.
The transaction was meticulously coordinated, with TD Securities leading as the Administrative Agent, Joint Lead Arranger, and Joint Bookrunner.
Moreover, a cohort of esteemed financial institutions, including Citizens Bank, CoBank, Deutsche Bank, First Citizens, and Société Générale, served as 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 assumed roles as Co-Documentation Agents, while Cadence Bank and Preferred Bank provided auxiliary support for the transaction. Jones Day acted as DataBank's legal advisor throughout the process.
DataBank's strategic move to establish a robust financing facility underscores its commitment to meeting the evolving demands of the digital landscape, particularly in accommodating the burgeoning requirements of AI workloads.
This initiative signifies a significant milestone in DataBank's expansion trajectory and reaffirms its dedication to sustainability and environmental stewardship through its green financing endeavors.
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