EdgeCore closes $521 million green bond securitization backed by Silicon Valley data center

EdgeCore Digital Infrastructure has closed a $521 million asset-backed securitization, its second in as many years. The issuance consists of designated green bonds and is backed by a single asset: the company's fully stabilized SV01 data center in Santa Clara, California.

The deal closed this week. Proceeds will refinance existing construction loans and fund future data center development.

What is behind the collateral?

SV01 sits at EdgeCore's Santa Clara campus in Silicon Valley. The two-story facility delivers 36MW of IT capacity across 255,200 sq ft (23,700 sqm). Construction began in January 2023, and the building launched in September last year. At full build-out, the two-building campus will reach 72MW across 540,000 sq ft (50,167 sqm).

An ABS is a financial instrument collateralized by a pool of underlying assets. Here, that pool is data centers with contracted revenue.

MUFG led the transaction as sole structuring advisor. ING and MUFG acted as joint book-running managers. First Citizens Capital Securities and Huntington Capital Markets served as co-managers. King & Spalding represented EdgeCore and Partners Group, and Milbank represented the underwriters.

What does this change for EdgeCore?

The raise gives the company cheaper, longer-dated capital than construction debt, and it signals that lenders will underwrite data center cash flows at scale. Julie Brewer, EVP of finance at EdgeCore, framed the deal as proof of delivery capacity in a constrained market.

"Today's announcement of our second ABS financing is a strong signal to the market that EdgeCore continues to deliver data center capacity with certainty despite industrywide delays related to power delivery, supply chain activities and capital deployment," Brewer said. "EdgeCore's exponential growth is supported by the strong financial backing of our owner, Partners Group, and our ability to raise funds through strategies such as this asset-backed securitization."

A repeatable financing model

This is EdgeCore's second ABS issuance. The first, last year, raised $235 million secured against PH01, a fully stabilized 26MW data center in Phoenix, Arizona. Both facilities are fully leased to the same high investment-grade hyperscale tenant. That single-tenant structure gives the securitizations a predictable revenue base, which is what makes the green bond pricing achievable.

Partners Group acquired EdgeCore in 2022 and committed up to $1.2 billion to fund the acquisition and build-out of existing and future sites. Fentress Boyse, Member of Management, Infrastructure at Partners Group, said the financing record reflects the quality of the platform's contracts.

"Since Partners Group acquired EdgeCore in late 2022, the company has grown into a scaled hyperscale platform serving the world's largest cloud and technology companies," Boyse said. "EdgeCore's second ABS financing in as many years demonstrates the quality of the contracted cash flows the team has built and the depth of capital available to support the platform. This is a reflection of EdgeCore's uncompromising delivery record in tandem with its focus on sustainability, community engagement, and safety."

Where the company stands

EdgeCore launched in 2018. It now operates and develops facilities across Silicon Valley, Phoenix, Reno in Nevada, and multiple sites in Virginia. The company has expanded rapidly since the Partners Group acquisition.

The deal size also marks a step up. The first ABS raised $235 million against one building. The second raises $521 million, more than double, against another. If the Santa Clara campus completes its second building, EdgeCore will hold a 72MW stabilized campus eligible for future capital markets issuance.