US Signal Lines Up $525m ABS Deal Secured by Ten Data Centers

US Signal is preparing to raise up to $525 million in debt across three asset-backed securities, secured against ten of its owned data centers, with KBRA assigning a preliminary A- rating to the notes.

The collateral pool spans 427,990 square feet (39,760 sqm) of data center space and supports around 22.5MW of critical load. For context, that's roughly the critical load of a single large hyperscale campus — but here it's spread across ten facilities, which shapes how KBRA reads the risk.

The numbers behind the deal are solid on the surface. The colocation facilities generate approximately $111.8 million of annualized recurring revenue (ARR) and $63.8 million of annualized adjusted net operating income (AANOI). That's an AANOI margin of roughly 57 percent on recurring revenue.

What does the customer base look like?

The portfolio serves 839 unique customers, with a weighted average remaining contract term of 2.1 years without renewals. Concentration is moderate: the largest customer accounts for 9.7 percent of ARR, while the top 20 customers represent approximately 40.8 percent.

Geographically, three properties — representing 13.6 percent of the pool's appraised value — sit in Texas. Two properties (6.9 percent) are in the Chicago market, and one property (2.5 percent) is in New York.

Why did KBRA apply tougher assumptions?

KBRA flagged the asset profile directly, noting that the "portfolio consists of older assets in secondary and tertiary data center markets, which generally exhibit smaller tenant bases, potentially more limited re-leasing opportunities, and reduced asset liquidity relative to primary markets."

To account for that, the agency said it "applied a stressed terminal capitalization rate of 12.0 percent, compared to a range of 10.5 percent to 11.5 percent for other KBRA-rated colocation ABS transactions."

In plain terms: KBRA assumes these buildings will be worth less at exit than comparable colocation collateral, so it demands more cushion. Practitioners pricing this deal should read that 12 percent cap rate as the agency's core credit view.

How is the $525m structured?

The debt comes in three tranches:

• $75 million in Variable Funding Notes, with an anticipated repayment date of November 2031 and final maturity of November 2056.
• $250 million on the same timeline — November 2031 anticipated repayment, November 2056 final maturity — at a fixed rate still to be determined.
• $200 million with an anticipated repayment date of November 2033, final maturity of November 2056, also at a TBD fixed rate.

For existing US Signal watchers, the structure mirrors the broader colocation ABS trend: long-dated maturities paired with earlier anticipated repayment dates, giving investors a refinancing checkpoint while the issuer locks in permanent-style capital. The variable funding tranche also gives the operator flexible working capital against the portfolio.

The deal is another sign that mid-market colocation operators can tap securitization markets at scale, even with KBRA's more conservative read on secondary-market assets.