Stack Infrastructure is looking to raise $100 million in funding via securitized notes.

Commencing on July 24, this is the second round of fundraising pursued by Stack this year and the sixth in total, after $250 million was successfully raised in March.

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The notes have been rated A-2 by S&P Global. While currently set at $100m, there is the potential for this to increase to $250m. The fundraising round is expected to close on July 28.

The securitized notes have an anticipated repayment of five years and will legally mature in 25 years. The funding is primarily backed by Stack’s data center portfolio which has not added any new properties and remains approximately the same as it did during the March fundraiser, valued at around $2.63bn. The data centers are located in Portland, Oregon; Atlanta, Georgia; Chicago, Illinois; Dallas, Texas; San Jose, California; New Albany, Ohio; and Sterling, Virginia, and have a total of 1.917 million sq ft (178,000 sqm) and 138MW of capacity.

If the fundraising round is successful, Stack Infrastructure will have raised a total of $2.3bn in securitized notes since 2019 of which $567m has been repaid.

S&P Global considers the long contract terms and value of the current tenants at Stack’s data centers to be a significant strength of the transaction, as well as the low historical customer ‘churn’ rates.

With this in mind, however, S&P also noted that there is limited tenant diversity. The rating notes that: “Approximately 43.6 percent of the leased capacity and 40.1 percent of AABR is attributable to one tenant, and 79.6 percent of the total AABR is attributable to the top five tenants.”

Additionally, the rating notes that: “A distressed tenant and its subsidiary are currently under bankruptcy proceeding, which could result in increased vacancies in the Chicago and Hillsboro campuses if the related leases are rejected. There may be costs and delays associated with the re-leasing of this capacity.”

The distressed tenant is likely Cyxtera, which filed for bankruptcy in June 2023 and has a presence listed on its site at Stack Infrastructure’s Chicago Elk Grove campus.

The arrangers and joint book runners for the fundraising round include: Morgan Stanley & Co. LLC, Guggenheim Securities LLC, SMBC Nikko Securities America Inc., TD Securities (USA) LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, MUFG Securities Americas Inc., and Truist Securities Inc.