Data center investment firm Cloud Capital has raised more than $1 billion in securitized funding.
The company last week announced the successful closing of its $1.325 billion asset-backed securities (ABS) issuance.
The proceeds of the transaction will be used to refinance existing debt as well as for general corporate purposes. The notes are backed by four stabilized data center assets in Northern Virginia and Minneapolis.
"We are proud to announce the successful issuance of Cloud Capital's first asset-backed security, achieving the highest rating of any data center ABS issuance under S&P Global Ratings new data center ratings methodology thanks to the robustness of our underlying assets and our team's ability to execute on a strategic vision,” said Hossein Fateh, founder and CEO of Cloud Capital. “It reflects our commitment to providing our sophisticated institutional investors with stable, high-performing opportunities in one of the most essential sectors globally. We are excited to set a new standard for financing in the digital infrastructure sector.”
The issuance is structured with five-year and seven-year senior tranches rated A(sf) and a five-year subordinated tranche rated A-(sf).
The transaction was led by Guggenheim Securities, LLC as the Sole Structuring Advisor and the Sole Active Bookrunning Manager, and Goldman Sachs & Co. LLC as the Passive Bookrunner.
Cloud Capital's chief investment officer, Shariar Mohajer, added: "This successful issuance highlights our ability to continually unlock value in our portfolio while delivering innovative capital markets solutions. The issuance was met with significant demand from investors, with the five-year and seven-year senior tranches and the five-year subordinated tranche all oversubscribed due to the strong credit profile and high-quality underlying assets."
Established in 2020 as the investment management affiliate of CloudHQ, Cloud Capital describes itself as a specialized investment management firm focused on acquiring, managing, and operating high-quality data centers. Since 2020, Cloud Capital has acquired a portfolio of data center assets worldwide valued at more than $4 billion.
Fateh founded CloudHQ in 2016 after stepping down from DuPont Fabros. The company says it has built and leased 2.4 million square feet and 320MW of data center capacity since its formation. He formed Cloud Capital to "acquire, manage, develop, and operate data centers."
CloudHQ has existing and planned data center developments across Virginia, Illinois, Minnesota, California, Texas, Mexico, Brazil, the UK, France, Germany, Netherlands, Italy, Thailand, and Japan.
Cloud Capital has recently established its Green Finance Framework to govern the issuance of green finance instruments, including green bonds, green loans, green ABS, and green tranches of ABS.
According to the framework, as of November 2024, CloudHQ has leased 11 data centers with a contracted IT load of more than 970MW in the US and Europe, of which 580MW+ is under construction.
