Vantage Data Centers has restructured its finances and raised $1.3bn in securitized debt for refinancing and expansion.
The money will come in the form of two low-rate loans and help it refinance outstanding debts. Vantage says the move will reduce overall costs by about 30 percent on average across its capital structure and extend debt maturities and will help in expansion.
The money was generated via securitized notes, rated “A-” by financial company Standard & Poor’s; and will be issued in two chunks during Vantage’s 2020-2021 and 2020-2022 funding rounds.
The proceeds will be used to refinance debt, but a portion of the money will go towards data center construction in North America.
Securitization financing is essentially a company mortgaging assets. The practice is common among telcos and in the housing market.
Vantage was the first company in the data center business that ever raised funds by securitizing its debt back in 2018. The company raised around $1.12bn. The company, at the time, did so to pay lower interest rates on its debt of $900m.
Sharif Metwalli, Vantage’s CFO, said: “The current market environment proved extremely advantageous for Vantage and our investors to lower our capital costs, extend maturities and provide funding for growth opportunities.
“Having access to capital at today’s attractive market rates gives us the ability to redeploy the realized savings with additional investments to grow the business across key regions throughout North America, where our customers’ data center requirements continue to increase.”