Cloud Capital Raises $1.325B in ABS for Data Centers

Cloud Capital, a data center investment management firm, has completed the issuance of $1.325 billion in asset-backed securities. The notes are supported by four stabilized data center assets in Minneapolis and Northern Virginia.

The transaction represents the sector’s lowest pricing spread for class A-2 senior notes since 2021. The issuance is constructed with a five-year and seven-year senior tranche rated A(sf) and a five-year subordinated tranche rated A-(sf).

The firm said the notes are classified as secured green standard bonds and are backed by a second-party opinion from Sustainalytics. Cloud Capital has recently implemented its green finance framework to govern the issuance of green finance instruments, such as green bonds, green loans, green ABS, and green tranches of ABS.

The net proceeds of the transaction will be used to refinance existing debt as well as for general corporate purposes. “Securing the highest S&P-rated ABS issuance in the data center sector demonstrates the strength of our platform and the stability and cash flowing potential of our data center portfolio,” said Cloud Capital’s EVP and head of capital markets, Jason Weaver.

Since 2020, Cloud Capital has acquired a portfolio of data center assets valued at over $4 billion. The firm has offices in Washington, D.C., Tampa, Florida, and London.

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 passive bookrunner.