Data center operator Centersquare is looking to raise $985 million in securitized notes as part of an ABS transaction.
The notes are split into four classes, three of which have been awarded a preliminary rating of A- by KBRA: the Series 2024-1, Class A-1 which is for $100 million, Series 2024-1, Class A-2 for $400 million, and Series 2024-2, Class A-2 also for $400 million.
The fourth set of notes, Series 2024-1, Class B, is for $85 million and has been given a BBB- rating by KBRA.
These are the first securitized notes raised by Centersquare, a newly formed company by the merging of Evoque and Cyxtera.
The Series 2024-1 notes all have an anticipated repayment date of October 2029, while the Series 2024-2 notes expect to be repaid by October 2031. All notes have a legal final maturity date of October 2054.
According to KBRA's analysis, the notes are secured by 21 data centers in the US which generate approximately $295.1 million in Total Annualized Monthly Recurring Revenue and $114 million in Annualized Adjusted Net Operating Income.
The data centers can further be separated into fee simple ownership of seven colocation data centers and leasehold interests in 14 colocation facilities.
The 21 data centers are comprised of approximately 809,358 sq ft (75,192 sqm) of data center space and can provide approximately 106.2 MW of critical load power to customers, of which Centersquare has 894. The main sectors leasing space in Centersquare data centers are companies in cloud and IT services, banking and securities, and network service providers.
Centersquare further states that 16 of its top 20 customers are investment-grade rated or have a market cap greater than $1.0 billion.
The company has an internal Green Financing Framework which was established in August 2024. Under this framework, Centersquare will use an amount equal to the net proceeds from the sale of the notes to finance and/or refinance a portfolio of eligible green assets.
Those "green assets" include investments and expenditures in Green Projects including energy-efficient investments in data center infrastructure that target a PUE of 1.50 or below for data center infrastructure built prior to January 1, 2021; or a PUE of 1.40 or below for data center infrastructure built on or after January 1, 2021.
Other Green Projects could include energy efficiency efforts surrounding equipment, systems, operational improvements, and maintenance that improve energy efficiency by 20 percent or more, such as upgrading UPS systems and cooling equipment.
Centersquare was formed in April 2024 after Brookfield merged Cyxtera and Evoque.
Cyxtera filed for Chapter 11 bankruptcy in June 2023. By November, the company announced a deal with Brookfield that will see the investment firm take over the colo provider, along with several leased data centers, for $775 million. That deal, which included a number of data center sales, exits, and lease amendments, was completed in January.
