Vantage raises $820 million in a cloud and AI data centre deal in Europe

Vantage, a prominent U.S. data center operator, has successfully secured €720 million (approximately $821.4 million) in a groundbreaking financing deal within Europe. This asset-backed securitization (ABS) represents the first euro-denominated transaction involving data center assets on the continent, encompassing four facilities located in Germany. The company disclosed that the average coupon rate on the bonds issued through this innovative process is set at 4.3%. In an ABS structure, Vantage utilizes its data center infrastructure and projected revenues as collateral to raise funds. The proceeds from this financing will primarily be directed towards settling existing construction loans that were previously acquired for these facilities. Sharif Metwalli, Vantage's chief financial officer, emphasized to CNBC the alignment of the ABS market with their asset profile, stating, "We believe the ABS market is particularly well-suited for our type of asset, which features real estate-centric, high credit quality tenants and long-term leases—elements that appeal to ABS investors." Despite the substantial funding acquired, Vantage noted that investor demand exceeded the capital raised. Rich Cosgray, the senior vice president of global capital markets at Vantage, mentioned that the transaction was significantly leveraged, adding, "We were basically two to four times oversubscribed on the respective financings, allowing us to tighten pricing substantially during the marketing process." The four data centers—two situated in Berlin and two in Frankfurt—are equipped to handle around 55 megawatts of power and are fully leased to hyperscale clients, as stated by the company. Earlier this year, these facilities were appraised at over $1 billion. Last year, Vantage made headlines by raising £600 million through the first-ever securitization of a data center in the EMEA region, involving two units from its Cardiff campus with a total power capacity of 148 megawatts. Currently, Vantage boasts a total of 2,500 megawatts of data center capacity either operational or under development across the region. This significant transaction was co-managed by Barclays Bank and Deutsche Bank, with Vantage receiving legal representation from the British law firm Clifford Chance.