Aligned Data Centers has completed a $1.183 billion asset-backed securities issuance to fund its development pipeline, refinance upcoming debt maturities, and satisfy reserve account requirements. The deal represents Aligned’s first securitization issuance since 2023.
Strong demand from institutional investors enabled the company to increase the financing size by approximately 30% above its original target of $905 million.
The upsizing reflects investor interest in data center infrastructure supported by long-term enterprise customers and in growing demand for computing capacity for hyperscale cloud and artificial intelligence workloads.
The securitization is divided across multiple tranches consisting of Class A-2-I and Class B term asset-backed securities notes.
Both classes have a five-year anticipated repayment date, which extends Aligned’s weighted average debt maturity profile.
An anticipated repayment date is the date on which a borrower expects to repay or refinance securitized debt. It may differ from the final legal maturity, depending on the structure of the notes.
Extending debt maturities can give an infrastructure company more time to complete projects, generate contracted revenue and manage refinancing requirements.
The financing is backed by four Aligned data center campuses serving 14 enterprise customers.
More than 90% of the transaction’s annualized adjusted base rent is generated by large, investment-grade counterparties.
Annualized adjusted base rent is a measure of the recurring rental revenue generated by the properties that support the securitization.
A high concentration of rent from investment-grade customers can make a financing more attractive to institutional investors because those companies are generally considered better able to meet long-term contractual obligations.
Asset-backed securities are financial instruments supported by the cash flows of specific assets. In the data center sector, those cash flows may include lease payments and other contracted revenue from customers using computing facilities.
The structure allows data center operators to raise capital against established facilities and customer commitments rather than relying only on conventional corporate debt.
Aligned said the transaction attracted institutional investors new to the company, as well as investors entering the data center asset-backed securities market for the first time.
Expanding its lender and investor base could give Aligned additional financing flexibility as it develops new campuses and expands existing facilities.
The company plans to use net proceeds to support its ongoing development pipeline, refinance debt approaching maturity and fund required reserve accounts.
Reserve accounts are commonly established within securitizations to provide additional protection for expenses, debt service or other obligations associated with the underlying assets.
Aligned develops and operates data centers for hyperscale, cloud and AI customers.
The rapid expansion of generative AI has increased demand for large computing environments capable of supporting high-density processors, networking equipment and specialized cooling systems.
These facilities can require substantial capital because developers must secure land, electricity, water and network connectivity while constructing buildings capable of supporting mission-critical technology infrastructure.
Data center securitization provides operators with another source of long-term capital as their portfolios mature and begin generating predictable contracted revenue.
Aligned said the completed financing demonstrates the continued development of the data center ABS market and increasing institutional demand for digital infrastructure assets.
The company emphasizes energy efficiency, adaptive infrastructure and responsible development.
Its portfolio includes more than 50 patents on water-saving cooling technology designed to support demanding computing workloads while reducing resource consumption.
Aligned Chief Financial Officer Meghan Baivier said the company’s capital partners support its growth strategy as its data center portfolio expands.
The privately held company expects the transaction to help fund long-term infrastructure opportunities while balancing customer demand, operational performance and development across the communities in which it operates.
KEY QUOTE:
“Our continuous growth is fueled by a relentless commitment to innovation, operational excellence, and customer success, balanced by a deep dedication to responsible development and our local communities.”
“Our capital partners are the bedrock of this strategy, and we thank them for their continued trust in our platform and technology.”
“As a private company focused on long-term infrastructure opportunities, we appreciate the continued support from the ABS market as our portfolio matures and expands.”
Meghan Baivier, Chief Financial Officer of Aligned Data Centers
