Data center firm Switch Inc. has raised $1.7 billion via securitized financing.
The DigitalBridge-owned company this week announced the successful completion of two asset-backed securities (ABS) transactions.
The issuance totaled $752 million and closed March 14, 2024. The second issuance, totaling $940.3 million, closed on June 17, 2024.
Switch said these two issuances make the company the largest data center ABS issuer year-to-date with a total of nearly $1.7 billion.
“Successfully executing these transactions marks a strategic milestone in the evolution of Switch’s capital structure, giving the company access to new investors, additional borrowing capacity, and a lower overall cost of debt,” said Thomas Morton, president of Switch.
The net proceeds will be used to refinance a portion of the company’s take-private mortgage loan, which was put in place at the time Switch was acquired by DigitalBridge and IFM Investors in December 2022.
“Capitalizing on the strong investor demand, we were able to execute both transactions with oversubscription levels across all classes of our bonds, and on the second issuance we were able to tighten pricing across our Class A and Class B bonds,” added Madonna Park, Switch CFO. “Given the success of these two issuances, combined with our robust portfolio of development and stabilized assets, we expect to continue to be an active issuer in the ABS market.”
All series of notes in these issuances were designated as green bonds under International Capital Markets Association Green Bond principles in accordance with Switch’s Green Financing Framework.
The first deal was led by Morgan Stanley who acted as the Sole Structuring Advisor. The second deal was led by Morgan Stanley and MUFG (Mitsubishi UFJ Financial Group) as Co-Structuring Advisors.
In addition to Co-Structuring Advisors Morgan Stanley and MUFG, TD Securities (USA), LLC and RBC Capital Markets, LLC, acted as Joint Bookrunners. Société Generale, Truist Securities, Scotiabank, Santander, Citizens Capital Markets, Goldman Sachs, and Guggenheim acted as Passive Bookrunners. ING, Natwest Markets, Standard Chartered Bank, and Zions Capital Markets acted as Co-Managers.
Founded in 2000, Switch also operates its large 'Prime' data center campuses in Austin, Texas; Reno, Las Vegas; Grand Rapids, Michigan; and Atlanta, Georgia. Over the last year it has filed to expand further in Austin and Atlanta.
DigitalBridge, alongside IFM Investors, took Switch private in an $11bn deal in December 2022. Australian pension fund Aware Super invested $500 million into Switch last year.
