Latest news with #VantageDataCenters
CNBC
6 days ago
- Business
- CNBC
How Vantage created a new asset class for European investors to gain exposure to cloud and AI data centers
A notable bond deal earlier this month not only provided hundreds of millions of euros to Vantage Data Centers but also created a new asset class for investors across Europe and a blueprint for similar companies to follow. Denver-based Vantage raised 720 million euros ($820 million) through the continent's first euro-denominated bond deal backed by its German data center assets, including an option to tap an additional 80 million euros. The asset-backed securitization (ABS) arrangement followed a similar £600 million deal ($840 million) in the U.K. last year. Both transactions, engineered by investment bankers at Barclays, do more than bankroll the company's growth. The deals, put together by law firms Clifford Chance and Hogan Lovells, have enabled European investors to gain direct exposure to the growth in cloud computing and artificial intelligence for the first time. Asset-backed securitization In an ABS, a company borrows money by issuing bonds against a pool of expected income from underlying assets as collateral. For data centers, the "assets" include the physical infrastructure — large facilities, cooling systems and power grids — along with long-term lease agreements with tenants, who in the case of Vantage were large cloud providers known as "hyperscalers." The stable cash flows that data centers typically generate are highly attractive to bond investors and allow operators like Vantage Data Centers to secure cheaper, fixed-rate financing to pay off more expensive construction loans. The bank loans are then recycled as investments into new projects. For Vantage, this model is central to its growth strategy. "The ABS, or securitization market, is the North Star from a financing perspective for this asset class," said Sharif Metwalli, Vantage's chief financial officer. "We are replicating the success we've had in North America in [Europe], and the plan is to do the same in other regions." Traditional bank financing might face limitations given the scale and pace of current expansion. The global data center market was valued at $195 billion in 2022 by real estate specialists CBRE. Consultants at McKinsey project that this will grow at a compounded annual growth rate of about 20% until 2030. The timeline for those forecasts is also being accelerated by the joint venture between Oracle , OpenAI, and Japan's Softbank, which announced a $500 billion investment over the next four years to build data centers to host AI supercomputers known as "Stargate." Given the backdrop, Vantage, through its British pound and euro-denominated deals, not only lowered its cost of borrowing but also effectively created a new asset class for institutional investors to gain exposure to this rapid growth. "I think it takes a player such as Vantage, who are familiar with the benefits of data centers, as well as public ABS issuances from the US, to be a pioneer for the market in Europe and introduce that type of financing," said Michael Nartey, who leads the structuring team at Barclays Investment Bank, which was behind both deals. The sheer growth, he noted, meant the industry "can't continue to just be financed by the private markets." Deal details Entry into Europe wasn't without its share of hurdles. The lack of comparable transactions historically meant the company and its investment banks, which also included Deutsche Bank on the German deal, had to undertake considerable investor education. The first U.K. transaction, which concluded in June 2024, took over nine months to execute, largely because of the intense "investor education process" required. "A lot of investors were very keen to understand the asset class, but didn't have much background on how, or even what, a data centre was," Nartey told CNBC. However, by the time of the German deal, investors reportedly began asking the "pertinent and more important questions" rather than just the fundamental "education-based questions," indicating increased familiarity with the asset class. Aside from the need to convince investors, concerns from rating agencies had to be resolved ahead of any bond issuance. Emma Matebalavu, a partner at law firm Clifford Chance that represented Vantage, explained that, unlike a typical European real-estate bond deal, Vantage's ABS structure required the bond-issuing entity itself to own the data-center properties. That required intricate legal work to ring-fence the assets within an existing business. Dietmar Helms, a partner at Hogan Lovells who advised Barclays, noted that for the German deal, a "bespoke" solution was needed to meet German real estate laws and tax rules while satisfying rating agencies that investors will not be faced with a sudden tax charge and dent their returns. "Every time that you sell a property, like a piece of land with a building, usually you pay a certain percentage of the value to the tax office," Helms explained. "A deal like this should be structured in a way that minimises the relating risks to give investors enough comfort on the robustness of the structure, because otherwise, the deal would just not make sense from an economic point of view." 'First-mover premium' This early move in Europe also came with a "first-mover premium" — a higher rate demanded by investors, given the lack of precedent. "The reason for this slight premium on spreads versus other comparable North American ABS transactions is really driven solely by relative liquidity in the market and general investor education," said Rich Cosgray, senior vice president of global capital markets at Vantage Data Centers. However, the company indicated more favorable terms were achieved — a drop of about 15 basis points above benchmark rates — in its second transaction in Germany, as an indicator of investors becoming more comfortable with this type of bond. "I would argue that data center issuance has become less of an 'esoteric' asset class in the US, given how many issuers are now accessing the market," Cosgray added. "We're still early in [Europe, the Middle East and Africa], but the liquidity is growing." What's in it for investors? Under the ABS structure, the creditworthiness of the tenants is paramount, as the bond's coupon payments are reliant on them. The four Vantage facilities in the German deal are fully leased to three hyper-scale companies, all rated AA- or higher, with the largest holding a coveted AAA rating, according to a note from Scope Ratings. The two recent European deals also borrow ideas from their previous U.S. transactions. For instance, the "soft bullet" style, whereby bonds are repaid within five years even though they mature decades later, is a feature of deals on both sides of the Atlantic. That meant that Vantage was able to attract its traditional U.S. investor base to its European issue. Vantage said the latest transaction also helped it broaden its European investor base. "We saw a lot more European dedicated insurance capital, fund managers, ABS buyers, come into this deal," Cosgray said. "The liquidity that we're expanding in this market is real securitization depth for European investors." The structure of the German deal also evolved from the U.K. deal by offering investors two tranches of debt: a senior Class A note rated A- and a smaller, subordinated Class B note rated BBB-. Both notes are considered investment grade by Scope. "I don't think investors view the credit risk for the B notes relative to A notes as significant but they're getting a better coupon," said Metwalli, Vantage's CFO. He highlighted that investors received a 65-basis-point pickup in yield for what could be perceived as only a marginal increase in risk with the Class B notes, which were four times oversubscribed. Vantage's foray into European ABS comes at a challenging time for the market. Data compiled by JPMorgan points to 57 billion euros of issuance so far in 2025, on track for a steep decline from the 140 billion euros raised in 2024. Analysts point to macroeconomic uncertainty as being largely responsible for the lack of deal-making. Growth The deals are designed keeping Vantage's global expansion in mind. The company also operates in major data center hubs in Dublin, Milan, Warsaw, Johannesburg and Zurich. Its footprint also spans the Asia-Pacific region, with facilities in Malaysia, Australia, Japan, Hong Kong and Taiwan. Vantage is now "very eager" to bring the same securitization model to its other markets, Cosgray added. He suggested the company is more likely to issue debt in local currency in those regions and will begin the process by the end of next year. Julian Craughan, a partner at Hogan Lovells, who advised Barclays, suggested there was scope for greater flexibility in future deals as other data-center operators enter the securitized debt market in Europe. "Investors have got one deal under their belt in continental Europe," said Craughan. "There is scope for further innovation in the future, for example we may be able to build these [ABS deals] out to include data centers in multiple jurisdictions as collateral as we see in the US market."
Yahoo
11-06-2025
- Business
- Yahoo
Vantage identified as operator for Port Washington's proposed 3.5 gigawatt data center campus
Port Washington residents finally have some clarity on one of the companies that would eventually occupy the proposed 3.5-gigawatt data center campus that developers say could be one of the country's largest: That long-awaited end user is Denver-based Vantage Data Centers. Cloverleaf Infrastructure, the Houston-based private-equity backed firm that acquired the land and permitting for the project, confirmed the identity of the company on June 11. The announcement comes three weeks after the City of Port Washington's Common Council annexed and rezoned around a third of the entire 1,900-acre project site from the Town of Port Washington for an initial phase of development to be completed by 2027. The rest of development is planned for completion by 2030. Vantage describes itself as a developer and operator of hyper scale data center campuses across the world, according to the company's website. Founded in 2010, Vantage "powers, cools, protects and connects the technology of the world's leading hyper scalers, cloud providers and large enterprises." The company says it is backed by a consortium of marquee investors and is working to aggressively pursue opportunities in key global markets where its customers are looking to expand. Vantage has pledged to achieve net zero carbon emissions globally by 2030. According to the company's website, it's go-to choice for cooling is air-cooled chillers in a closed-loop system, which it says saves water and energy. However, it is not yet clear how it would choose to cool the data centers in Port Washington. The company currently has 35 campuses across the world, five of which are in the United States in Virginia, Ohio, Arizona, Washington and California. Cloverleaf Chief Development Officer Aaron Bilyeu declined to comment beyond confirming the end user company's identity. Wisconsin is already home to over 40 data centers, according to a data center industry mapping site, though the vast majority are several magnitudes smaller in size and energy use compared with the Port Washington proposal. That total is likely to increase and new proposals will likely be on the larger side of the scale, as state officials are positioning Wisconsin to capitalize on the burgeoning AI and data center industry. State legislators have worked to attract data center companies to Wisconsin and are currently working to clear the path for this project and other current and future data centers in the state by removing limits on tax incremental financing districts that could be used to help finance these projects. The Journal Sentinel has reached out to Vantage over email and phone but has not immediately heard back. Details about the project's final form will hinge upon ongoing and future negotiations between Vantage, We Energies, Cloverleaf and American Transmission Co., with oversight from the city, the Public Service Commission and the Wisconsin Department of Natural Resources. Some of those critical decisions include whether Lake Michigan water will be used for cooling the energy-intensive servers, how to address the campus' localized environmental impact, what new energy assets will be built to power the project and how potential plans for AI might affect the general public ― all concerns expressed by residents near the site who are following the proposal closely. Already, broad concept plans for the massive campus include 11 data center buildings and five substations. These buildings would house thousands of interconnected computers linked to the outside world through fiber optic cables to power most modern online services, like social media, video streaming, cloud storage, banking, air traffic control and, increasingly, AI tools. Cloverleaf has said it's already working with We Energies to bring 1.3 gigawatts worth of power-generating assets onto the grid by 2027 for the first phase of the project, around 30% to 40% of which would be renewable, according to the firm. Also by 2027, American Transmission Co. is planning to bring a new high-voltage power line to the site. Contact Claudia Levens at clevens@ Follow her on X at @levensc13. This article originally appeared on Milwaukee Journal Sentinel: Vantage to operate proposed data center campus in Port Washington
Yahoo
09-06-2025
- Business
- Yahoo
Vantage Data Centers Completes Industry's First Euro-Based Data Center Asset-Backed Securitization (ABS) with €640M Transaction
Incremental green financing will drive continued, sustainable developments across the refinanced portfolio DENVER & LUXEMBOURG, June 09, 2025--(BUSINESS WIRE)--Vantage Data Centers, a leading global provider of hyperscale data center campuses, today announced it has raised €640 million in securitized term notes, marking the first-ever euro-based securitization of data center assets in Continental Europe. The transaction includes an additional €80 million in unfunded Variable Funding Notes. The Class A-2 Notes are rated A-, and the Class B Notes are rated BBB- by Standard & Poor's and Scope Ratings. This transaction follows Vantage's success last year with the first-ever EMEA data center ABS completed in British pound sterling. The notes will be used to refinance four data centers in Germany, two in Offenbach, Frankfurt, and two in Berlin, all of which are fully leased to hyperscale customers. The refinancing is part of Vantage's wider efforts to further expand its presence in the EMEA region and accelerate time to market to meet mounting demand for AI and cloud capacity. Surplus funds will be allocated toward capital expenditures and broader corporate initiatives. The notes have an anticipated five-year repayment date. "The issuance of the first euro-denominated ABS in the data center sector marks a significant milestone in digital infrastructure financing. Having previously issued the first data center ABS in both North America and EMEA (sterling-denominated), Vantage continues to showcase our innovative approach to capital markets and our ability to unlock new funding vehicles to fuel our global expansion," said Rich Cosgray, senior vice president, global capital markets for Vantage Data Centers. Vantage was represented by Clifford Chance LLP, and the transaction was led by Barclays and Deutsche Bank as active Joint Lead Managers. The transaction was supported by ING and Natixis as Joint Lead Managers and ABN Amro, Banco De Sabadell, SMBC and Societe Generale as Co-Managers. Barclays acted as Sole Structuring Advisor and Sole Green Structuring Advisor, and the transaction achieved a Green Bond designation via a Second-Party Opinion (SPO) from Morningstar Sustainalytics. The funds raised will contribute to advancing the United Nations Sustainable Development Goals (SDGs) and will facilitate the innovation of next-generation sustainable solutions aimed at reducing Vantage's environmental impact. For more information, please refer to the company's Green Bond Framework. Over the last 12 months, Vantage has raised €2.2 billion in new debt financing for its EMEA platform. For more information about Vantage's growing EMEA footprint, please visit: About Vantage Data Centers Vantage Data Centers powers, cools, protects and connects the technology of the world's well-known hyperscalers, cloud providers and large enterprises. Developing and operating across five continents in North America, EMEA and Asia Pacific, Vantage has evolved data center design in innovative ways to deliver dramatic gains in reliability, efficiency and sustainability in flexible environments that can scale as quickly as the market demands. For more information, visit Nothing in this press release constitutes an offer to sell or the solicitation of an offer to buy the notes in any jurisdiction, and there shall not be any sale of the notes in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. View source version on Contacts Press Contacts Mark FreemanVantage Data Centersmfreeman@ +1-202-680-4243 Robin BectelREQ for Vantage Data Centersvdc@ +1-202-936-6335 Nigel ParkerFulfil Communications for Vantage Data Centers, EMEAnigelp@ +44-(0)-7778-872-457
National Post
09-06-2025
- Business
- National Post
Vantage Data Centers Completes Industry's First Euro-Based Data Center Asset-Backed Securitization (ABS) with €640M Transaction
Article content Incremental green financing will drive continued, sustainable developments across the refinanced portfolio Article content DENVER & LUXEMBOURG — Vantage Data Centers, a leading global provider of hyperscale data center campuses, today announced it has raised €640 million in securitized term notes, marking the first-ever euro-based securitization of data center assets in Continental Europe. The transaction includes an additional €80 million in unfunded Variable Funding Notes. The Class A-2 Notes are rated A-, and the Class B Notes are rated BBB- by Standard & Poor's and Scope Ratings. This transaction follows Vantage's success last year with the first-ever EMEA data center ABS completed in British pound sterling. Article content The notes will be used to refinance four data centers in Germany, two in Offenbach, Frankfurt, and two in Berlin, all of which are fully leased to hyperscale customers. The refinancing is part of Vantage's wider efforts to further expand its presence in the EMEA region and accelerate time to market to meet mounting demand for AI and cloud capacity. Surplus funds will be allocated toward capital expenditures and broader corporate initiatives. The notes have an anticipated five-year repayment date. Article content 'The issuance of the first euro-denominated ABS in the data center sector marks a significant milestone in digital infrastructure financing. Having previously issued the first data center ABS in both North America and EMEA (sterling-denominated), Vantage continues to showcase our innovative approach to capital markets and our ability to unlock new funding vehicles to fuel our global expansion,' said Rich Cosgray, senior vice president, global capital markets for Vantage Data Centers. Article content Vantage was represented by Clifford Chance LLP, and the transaction was led by Barclays and Deutsche Bank as active Joint Lead Managers. The transaction was supported by ING and Natixis as Joint Lead Managers and ABN Amro, Banco De Sabadell, SMBC and Societe Generale as Co-Managers. Barclays acted as Sole Structuring Advisor and Sole Green Structuring Advisor, and the transaction achieved a Green Bond designation via a Second-Party Opinion (SPO) from Morningstar Sustainalytics. The funds raised will contribute to advancing the United Nations Sustainable Development Goals (SDGs) and will facilitate the innovation of next-generation sustainable solutions aimed at reducing Vantage's environmental impact. For more information, please refer to the company's Green Bond Framework. Article content Over the last 12 months, Vantage has raised €2.2 billion in new debt financing for its EMEA platform. Article content About Vantage Data Centers Article content Vantage Data Centers powers, cools, protects and connects the technology of the world's well-known hyperscalers, cloud providers and large enterprises. Developing and operating across five continents in North America, EMEA and Asia Pacific, Vantage has evolved data center design in innovative ways to deliver dramatic gains in reliability, efficiency and sustainability in flexible environments that can scale as quickly as the market demands. Article content Nothing in this press release constitutes an offer to sell or the solicitation of an offer to buy the notes in any jurisdiction, and there shall not be any sale of the notes in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Article content Article content Article content Article content Contacts Article content Press Contacts Article content Article content Mark Freeman Article content Article content Vantage Data Centers Article content Article content mfreeman@ Article content Article content Robin Bectel REQ for Vantage Data Centers vdc@ +1-202-936-6335 Article content Article content Article content
Business Wire
09-06-2025
- Business
- Business Wire
Vantage Data Centers Completes Industry's First Euro-Based Data Center Asset-Backed Securitization (ABS) with €640M Transaction
DENVER & LUXEMBOURG--(BUSINESS WIRE)--Vantage Data Centers, a leading global provider of hyperscale data center campuses, today announced it has raised €640 million in securitized term notes, marking the first-ever euro-based securitization of data center assets in Continental Europe. The transaction includes an additional €80 million in unfunded Variable Funding Notes. The Class A-2 Notes are rated A-, and the Class B Notes are rated BBB- by Standard & Poor's and Scope Ratings. This transaction follows Vantage's success last year with the first-ever EMEA data center ABS completed in British pound sterling. The notes will be used to refinance four data centers in Germany, two in Offenbach, Frankfurt, and two in Berlin, all of which are fully leased to hyperscale customers. The refinancing is part of Vantage's wider efforts to further expand its presence in the EMEA region and accelerate time to market to meet mounting demand for AI and cloud capacity. Surplus funds will be allocated toward capital expenditures and broader corporate initiatives. The notes have an anticipated five-year repayment date. 'The issuance of the first euro-denominated ABS in the data center sector marks a significant milestone in digital infrastructure financing. Having previously issued the first data center ABS in both North America and EMEA (sterling-denominated), Vantage continues to showcase our innovative approach to capital markets and our ability to unlock new funding vehicles to fuel our global expansion,' said Rich Cosgray, senior vice president, global capital markets for Vantage Data Centers. Vantage was represented by Clifford Chance LLP, and the transaction was led by Barclays and Deutsche Bank as active Joint Lead Managers. The transaction was supported by ING and Natixis as Joint Lead Managers and ABN Amro, Banco De Sabadell, SMBC and Societe Generale as Co-Managers. Barclays acted as Sole Structuring Advisor and Sole Green Structuring Advisor, and the transaction achieved a Green Bond designation via a Second-Party Opinion (SPO) from Morningstar Sustainalytics. The funds raised will contribute to advancing the United Nations Sustainable Development Goals (SDGs) and will facilitate the innovation of next-generation sustainable solutions aimed at reducing Vantage's environmental impact. For more information, please refer to the company's Green Bond Framework. Over the last 12 months, Vantage has raised €2.2 billion in new debt financing for its EMEA platform. For more information about Vantage's growing EMEA footprint, please visit: About Vantage Data Centers Vantage Data Centers powers, cools, protects and connects the technology of the world's well-known hyperscalers, cloud providers and large enterprises. Developing and operating across five continents in North America, EMEA and Asia Pacific, Vantage has evolved data center design in innovative ways to deliver dramatic gains in reliability, efficiency and sustainability in flexible environments that can scale as quickly as the market demands. For more information, visit Nothing in this press release constitutes an offer to sell or the solicitation of an offer to buy the notes in any jurisdiction, and there shall not be any sale of the notes in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
