Netrality Data Centers – one of the largest, privately held owners and operators of core interconnection facilities in the U.S. – recently announced it has secured a $380 million sustainability-linked credit facility (SLL).
The SLL will fuel data center expansion projects that embody sustainable designs and implement infrastructural measures to support the reduction of power usage effectiveness (“PUE”) levels across Netrality’s portfolio.
The SLL comprises a $125 million initial term loan, a $145 million revolving credit facility, and a $110 million delayed draw term loan. Interest payments on the SLL are adjusted based on Netrality achieving annual targets related to energy-efficient capital expenditures and reduction in portfolio PUE, which will be externally verified by third parties.
This SLL reinforces Netrality’s mission to enhance the energy efficiency of its existing data halls and sustainably add new data halls — equipped with robust network architectures and energy-efficient infrastructure that meets critical power utilization goals. And qualifying capital expenditures defined in the SLL will support the sustainable buildout of new data halls with a design PUE of less than or equal to 1.5.
Cognizant of the environmental impact of its operations, Netrality will allocate funds toward advancing existing data halls with state-of-the-art technologies and energy-efficient upgrades to optimize power consumption and lower current PUE levels. Sustainability initiatives will include advanced waterless cooling and liquid cooling technologies, AI-enabled cooling software, high-efficiency UPS and electrical distribution upgrades, renewable energy purchases, and smart LED lighting to drive greater environmentally responsible energy usage.
This SLL marks Netrality’s second sustainability-focused loan. In January 2023, Netrality announced it secured a $45 million construction loan with Oakwood Bank as Administrative Agent, Sole Lead Arranger, and Sole Bookrunner, along with Blue Sky Bank and Bank Midwest. The loan supports the construction, which has been designed for energy and water conservation, at Netrality’s KC2-7801 Nieman Road facility in Shawnee, Kansas.
Netrality’s facilities are located where the densest long-haul fiber optic networks and metro-fiber intersect — empowering customer interconnectivity, rapid data transmission, network diversity, and global reach. The recent sustainability-linked financing expands Netrality’s ability to deliver always-on connectivity for latency-sensitive, mission-critical businesses within an environmentally conscious framework.
J.P. Morgan acted as the Administrative Agent, Joint Bookrunner, and Joint Lead Arranger while Societe Generale and TD Securities (USA) LLC acted as Joint Bookrunners, Joint Lead Arrangers and Sustainability Structuring Agents. In addition, Huntington Bank acted as Managing Agent. Goldman Sachs was also a lender in the facility.
KEY QUOTES:
“We are thrilled to announce the successful closing of a sustainability-linked loan, marking a significant milestone in our journey toward a more sustainable future. With this loan, we are making a significant step in accomplishing our broader environmental commitments, encompassing carbon emission reductions, energy efficiency, and responsible water usage. In addition to refinancing a portion of our existing debt facilities, the loan plays a pivotal role in enabling the expansion of our portfolio — meeting the ever-growing demands for capacity and connectivity in an environmentally conscious manner.”
– Gerald M. Marshall, President and Chief Executive Officer of Netrality
“The objectives outlined in the sustainability-linked loan align seamlessly with our broader environmental, social, and governance (“ESG”) strategies — implemented to support the sustainability initiatives of our stakeholders, from our valued customers to our debt and equity investors. This commitment underscores our dedication to operate in harmony with ESG principles and prioritize our environmental stewardship.”
– Josh Maes, Chief Operating Officer of Netrality
“This was an especially gratifying deal for Societe Generale to work on, partnering with a leading data center company on a financing solution that will spur the expansion of critical technology infrastructure in a more energy efficient, sustainable manner.”
– Lana Feteiha, of Societe Generale’s Sustainable Finance team
“TD Securities was pleased to support Netrality as a Sustainability Structuring Agent on the sustainability-linked credit facility. Decarbonization of digital infrastructure is critical to advancing the low-carbon economy and Netrality’s commitment to creating sustainable data center environments furthers this objective.”
– Amy West, Global Head of ESG Solutions, TD Securities
