Data center infrastructure developer Serverfarm has closed its first asset-backed securities (ABS) offering at $589 million.

The transaction was secured by three data center facilities: in Atlanta, a 153,000 sq ft (14214 sqm) facility with 12MW of critical IT capacity; a 300,000 sq ft (27,870 sqm) AI-ready Chicago facility with 21.3MW of critical IT capacity; and a Los Angeles facility with 17.5MW of critical IT capacity.

The facilities primarily serve hyperscaler customers.

The transaction consists of $543m of 5.377 percent A-rated notes and $46 of 5.866 percent BBB- rated notes. Some 19 institutional investors participated in the transaction, with an anticipated repayment date of November 2030.

The notes were rated by S&P Global Ratings.

“This inaugural ABS issuance validates Serverfarm’s track record of delivering world-class hyperscale infrastructure with operational excellence,” said Avner Papouchado, CEO of Serverfarm. “The strong investor response reflects confidence in our stabilized asset performance and our proven ability to develop and operate mission-critical data center facilities supporting the world’s leading cloud providers and AI innovators.”

Recep Kendircioglu, global head of infrastructure, Manulife Investment Management, added: “Capital recycling is a critical component of Serverfarm’s financing strategy and sustainable growth plans. The company’s proven ability to secure financing at attractive rates across capital markets is a testament to the strength of Serverfarm’s platform and institutional capabilities.”

Serverfarm, which was founded in 2009 by real estate development firm Red Sea Group and acquired by Manulife in 2023, said the ABS offering forms part of its broader capital strategy to fund “aggressive expansion” of AI infrastructure for hyperscalers.

The company said the transaction will provide long-term financing for stabilized assets, while preserving development capital for global data center campus expansion.

This is the second of two fundraising rounds Serverfarm is using to grow its data center footprint. Last week, Serverfarm secured a 23-lender $3 billion credit facility for the development and construction of hyperscale campuses in North America.

Papouchado said this $3bn facility would provide a capital foundation to accelerate its hyperscale campus development pipeline.

The company currently operates ten data centers, seven of which are based in the US. The remaining three sites are spread across Amsterdam, London, and Israel.