Cooling wall of Delta-3 units inside the Aligned data center. (Photo: Agreed)
Sustainable financing is part of the data center industry’s greener bottom line as leading players focus their capital on sustainability.
Aligned has taken a big step forward in this future by providing $ 1.75 billion in sustainable funding to expand its digital infrastructure business. The package includes $ 1.35 billion in securitized bonds that qualify as sustainable loans, which Aligned says is the first of its kind in the data center industry, as well as $ 375 million in new sustainability-related loan (SLL).
The funds will accelerate Aligned’s growth by allowing the developer to acquire land in key US and international markets for new construction, as well as expanding existing data center campuses.
This epic transaction also demonstrates Wall Street’s interest in the intersection of digital infrastructure and sustainability, enabling financial products to help meet ESG (environmental, social and governance) criteria for lending and financing purposes. Aligned worked with a group of leading finance companies to develop a sustainable finance package.
For agreed, sustainable financing it is another way to meet the priorities of its largest customers, including hyperscale operators who have set ambitious targets to reduce or eliminate their climate impact.
“We believe that sustainability is not a passing trend; is a competitive advantage for today’s data centers and the key to our customers’ success, ”says Andrew Schaap, CEO Agreed… “We are also very fortunate to have leading financial institutions whose business spirit complements our vision for green data center infrastructure and transparency and accountability in meeting and exceeding our long-term sustainability goals.”
Sustainable development in everything
Aligned is one of the beneficiaries of the growing interest in sustainable financingas investors seek to align their portfolios with climate resilience requirements. In our Forecast for 2021Data Center Frontier singled out sustainable funding as one of eight trends that will shape the digital infrastructure industry this year.
“We believe that sustainability is not a passing trend; it is a competitive advantage for a modern data center. ”
Agreed CEO Andrew Schaap
The new funding will come in a few weeks after approval. increased its senior secured credit line by $ 250 million to $ 1.25 billion. When the line of credit was announced last September, Aligned became the first data center company to use sustainability loan (SLL) in which the borrower receives a lower interest rate while meeting benchmarks for sustainable practices. The company says it met and exceeded all requirements for the original line of credit, which laid the foundation for expansion as well as new loans.
Aligned creates “smart infrastructure” to address power management challenges through refrigeration and supply chain innovations. Its offering is aimed at technology-oriented customers, especially growing Internet companies. The company recently acquired property in Salt Lake City for individual data center project as well asentry into the Greater Chicago market… Aligned operates data center campuses in Dallas, Phoenix, Salt Lake City and Ashburn, Virginia…
Sustainability has long been a priority for Aligned, which prioritizes efficiency and energy conservation in its bulk and scalable data center solutions. Recent headlines have highlighted climate risks, prompting customers to focus on eliminating fossil fuels in their IT areas. Aligned said that fits the entire energy footprint their data centers with the purchase of renewable energy.
Securitized bonds and stability
Today’s announcement concerns Aligned’s first use of securitized bonds, in which the borrower creates collateral based on the creditworthiness of a specific pool of assets rather than the entire company. Data center designers can issue debt securities backed by cash flow from existing data centers that are leased to some of the largest and most creditworthy companies in the world.
This credit quality of the lessee allows the issuer to pay lower interest rates on its debt, which reduces its costs as it seeks to compete and build additional properties. Securitization has been used by companies such as Vantage data centers, STACK Infrastructure, Database and Data Centers Sabey…
Aligned has made great strides in securitized offerings. The wholly-owned subsidiary Aligned issued $ 1.35 billion in securitized bonds, divided into three levels:
- $ 1.05 Billion Time Bills with Investment Grade A- from Standard & Poor’s
- The $ 150 Million Time Bills are rated BBB by S&P.
- $ 150 million Variable Lead Bonds with investment grade A- from Standard & Poor’s.
Aligned Says These Notes Are The First-Ever Securitization Of Green Data Centers And Have Been Externally Verified Sustainalytics to meet the criteria for sustainability-linked loans – debt instruments that ensure the overall performance of the ESG through sustainability targets agreed upon between the company and its investors.
Aligned’s $ 1.35 billion securitized bond, the largest ever and the industry’s first green data center securitization, represents another major milestone in the series for our organization, said Anubhav Raj, Chief Financial Officer of Aligned. “We are grateful to our financial advisors and client banks, whose confidence in Aligned’s ability to continually innovate and address data center resilience will help drive the future of green data centers and market expansion as demand grows.”
Several financial firms and consultants participated in the package. Guggenheim Securities, LLC acted as the sole structuring consultant and joint active bookrunning manager of the securitized bonds. Deutsche Bank Securities, Goldman Sachs & Co. LLC and Wells Fargo Securities also acted as joint active bookrunners of the term notes. Aligned has hired ING as agent and co-manager for sustainability, and Citi, Citizens Capital Markets, Nomura and TD Securities as co-managers for the term. DLA Piper said it was advising Aligned on financing issues.