November 28, 2023
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Netrality Data Centers, the largest, privately held owner and operator of core interconnection facilities in the U.S., 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 reducing power usage effectiveness (“PUE”) levels across Netrality’s portfolio.
J.P. Morgan acted as the Administrative Agent, Joint Bookrunner and Joint Lead Arranger. Societe Generale and TD Securities (USA) LLC acted as Joint Bookrunners, Joint Lead Arrangers and Sustainability Structuring Agents. In addition, Huntington Bank served as the Managing Agent. Goldman Sachs was also a lender in the facility.
The SLL consists of 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 third parties will externally verify.
Netrality said that the SLL reflects the company’s dedication to enhancing its existing data halls’ energy efficiency and sustainably adding new data halls. These facilities have next-gen network architectures and efficient infrastructure that meet critical power utilization goals. 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.
But the SLL is not just about new data center facilities. Netrality will also 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 and liquid cooling technologies, artificial intelligence “AI” AI-enabled cooling software, high-efficiency UPS and electrical distribution upgrades, renewable energy purchases, and smart LED lighting to drive more significant environmentally responsible energy usage.
The SLL marks Netrality’s second sustainability-focused loan. In January, 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, designed for energy and water conservation, at Netrality’s KC2-7801 Nieman Road facility in Shawnee, Kansas.
Netrality’s facilities are located where there’s a density of intersecting long-haul and metro optical networks — offering customers interconnectivity, rapid data transmission, network diversity, and global reach.
“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,” said Gerald M. Marshall, president and CEO of Netrality.
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