US-based Vantage Data Centers has made history in Europe by raising €720 million ($820 million) in a groundbreaking financing deal — the first-ever euro-denominated asset-backed securitization (ABS) tied to data centers on the continent.
The funds will be used to pay off construction loans associated with four hyperscale data centers, located in Berlin and Frankfurt. These facilities, which provide 64 megawatts of power, are fully leased to major cloud and AI-driven companies, ensuring stable long-term revenue.
This move highlights the growing demand for data center infrastructure, especially as tech giants expand their AI and cloud computing needs. Unlike traditional loans, an ABS deal allows companies to borrow money by using their physical assets and future income as collateral.
Vantage Chief Financial Officer Sharif Metwalli told CNBC: “We believe the ABS market in particular is kind of best suited for our type of asset, which is real estate centric, high credit quality tenants, long term leases, something that is almost perfect for the ABS investor.”
Despite the high leverage, investor interest was overwhelming. Rich Cosgray, Vantage’s senior VP of Global Capital Markets, said: “This transaction was actually pretty highly levered, frankly…yet, despite that, we were basically two and four times oversubscribed on the respective financings.”
Strong investor confidence
The data centers were recently valued at $1 billion by Scope Ratings, which gave A and BBB ratings to the bonds, indicating strong and good credit quality, respectively.
This financing marks Vantage’s second major ABS transaction in Europe. Last year, the company raised £600 million using a model similar to that of its Cardiff campus in the UK, which has 148 megawatts of capacity.
The company has now raised a total of €2.2 billion ($2.51 billion) in debt financing for its European operations. Globally, Vantage has issued around $7.5 billion in ABS across nine transactions.
“The issuance of the first euro-denominated ABS in the data center sector marks a significant milestone in digital infrastructure financing,” Cosgray said as quoted by Data Center Dynamics. “Vantage continues to showcase our innovative approach to capital markets and our ability to unlock new funding vehicles to fuel our global expansion.”
Barclays Bank and Deutsche Bank were joint lead managers in the transaction. Clifford Chance, a British law firm, provided legal representation. The bond is set to carry an average coupon of 4.3%, which many in the market consider attractive given the scale and quality of the underlying assets.
The European data center market is projected to grow by 20% in 2025, driven by increasing demand in cities such as Frankfurt, London, and Amsterdam. Vantage’s latest deal proves investors are warming up to data centers as a viable asset class in Europe.
