Cloud Capital Achieves Landmark Success with One of the Highest-Rated and Largest ABS Issuances in the Data Center Sector, Raising $1.325 Billion

Cloud Capital Achieves Landmark Success with One of the Highest-Rated and Largest ABS Issuances in the Data Center Sector, Raising $1.325 Billion

Cloud Capital’s attractive financing strategy was supported by highly strategic, stabilized assets with long-term triple-net leases to investment grade tenants in key data center markets.

WASHINGTON, Dec. 5, 2024 /PRNewswire/ — Cloud Capital, a leading data center investment management firm dedicated to acquiring high quality data centers globally, announced today the successful closing of its $1.325 billion asset-backed securities (“ABS”) issuance. This transaction represents the lowest Class senior notes (class A-2) pricing spread in the sector since 2021. The notes are backed by four stabilized data center assets in Northern Virginia and Minneapolis.

Hossein Fateh, Founder and Chief Executive Officer of Cloud Capital, remarked :

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.

“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).

Cloud Capital’s Chief Investment Officer, Shariar Mohajer, said

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.”

Underscoring Cloud Capital’s commitment to sustainable investment practices, the notes are considered Secured Green Standard Bonds supported by a second party opinion from Sustainalytics. 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.

The net proceeds of the transaction will be used to refinance existing debt as well as for general corporate purposes.

Cloud Capital’s Executive Vice President and Head of Capital Markets, Jason Weaver, said :

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.

“This will provide us with an additional source of capital, reducing our cost of debt and benefitting our fund investors,”

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. 

READ the latest news shaping the data centre market at Data Centre Central

Cloud Capital Achieves Landmark Success with One of the Highest-Rated and Largest ABS Issuances in the Data Center Sector, Raising $1.325 Billion, source