Aligned Data Centers Completes $1.2B Securitization Financing

Aligned Data Centers has completed a $1.18 billion asset-backed securities issuance that was upsized by nearly 30 percent from its original $905 million target due to strong investor demand.

The company broadened its investor base with this issuance, securing commitments from institutional investors that are both new to Aligned and new to the broader data center ABS market. Net proceeds from the transaction will fund the company’s ongoing development pipeline, refinance upcoming debt maturities and satisfy mandatory reserve account requirements.

The ABS issuance is backed by four data centers and 14 enterprise customers. Aligned declined to identify the locations other than to say they are all in Tier 1 markets. However, Data Center Dynamics reported the sites are facilities in Ashburn, Va., Plano, Texas, and Northlake, Ill.

---

READ ALSO: Has Data Center Development Hit a Wall?

---

More than 90 percent of the transaction’s annualized adjusted base rent is supported by investment-grade counterparties. The securitization is structured across multiple Class A-2-I and Class B term ABS notes. Both classes feature a five-year anticipated repayment date, extending the company’s weighted average debt maturities.

It is Aligned’s first ABS issuance in nearly three years. Meghan Baivier, Aligned CFO, told Commercial Property Executive the return to the ABS market demonstrated strong support and investor confidence in the Aligned platform, its assets, customer base and ability to operate the data centers that are now cash-flowing assets. She noted the upsizing of the issuance also recognizes the role data centers are playing in the ABS market and the growing amount of capital flowing to data centers within the broader ABS market.

“I think it’s a sign of continuing growth in the ABS market in general, but also in particular the position that Aligned continues to take within the broader industry,” Baivier said.

The transaction also comes less than a week after the Artificial Infrastructure Partnership, Abu Dhabi-based MGX and BlackRock’s Global Infrastructure Partners completed the $40 billion acquisition of Aligned from Macquarie Asset Management. At the time of closing, the consortium earmarked an additional $5 billion for Aligned’s future expansion.

“Aligned has continued to grow and mature its portfolio, and with the closing of the sale to the AIP consortium, this now brings tremendous clarity to our path forward as a private company and private development platform,” Baivier told CPE.

Aligned develops and operates data centers for hyperscale, cloud and artificial intelligence workloads. The Dallas-based company’s portfolio currently spans 51 properties in gateway markets such as Northern Virginia, Chicago, Dallas, Ohio, Phoenix and Salt Lake City. Aligned also has international operations in São Paulo, Querétaro, Mexico and Santiago, Chile.

Aligned’s diversified financial toolkit

In addition to the 2023 ABS issuance, Aligned issued $1.35 billion in securitized notes in August 2021. It was the largest-ever inaugural data center securitization and was also the first green data center securitization.

While it’s a tool they haven’t used recently, Baivier said the ABS market is “expected to continue to play a significant role in how we capitalize our stabilized assets.”

The company leverages the institutional capital markets for later-stage development assets with a diversified toolkit from various sources. Early last year, Aligned brought in more than $5 billion of primary equity and over $7 billion of debt commitments to fund growth.

More recently, Aligned closed on a $2.6 billion credit facility in March funded by insurance, pension fund and other institutional investors to support later-stage development for the company’s U.S. expansion. The revolving credit facility is supported by six data center facilities in the existing portfolio in Dallas, Phoenix and Northern Virginia. The facility features an initial term of three years, with two one-year extension options.

Baivier said in March the new revolving facility diversified Aligned’s funding sources by tapping non-bank institutional capital and adding another tool to the company’s financial toolkit.