German project and export finance institution KfW IPEX-Bank has acted as coordinating lead arranger on a US$650 million accordion financing for a data centre campus in Mesa, Arizona.
Data centre developer EdgeCore Digital Infrastructure will run the 206-megawatt campus, which will consist of three data centres: a 26MW facility which is already in service and two others under construction totalling 180MW. At full buildout, the Mesa campus will be able to support a minimum of 450MW of critical load.
The accordion financing is part of the US$1.9 billion debt financing EdgeCore secured in January. The financing comprises a limited-recourse senior secured term loan, a revolving senior secured letter of credit facility, and the current accordion feature that will fund future developments.
“We are glad to have won EdgeCore as a new customer,” says Andreas Ufer, a member of the KfW IPEX-Bank management board. “This transaction supports our client's continued growth and development and underlines our profound expertise in financing digital infrastructure projects worldwide.”
In November 2022, EdgeCore was acquired by Partners Group, a Swiss-based private markets firm. Acting on behalf of its clients, Partners Group pledged to invest up to US$1.2 billion to fund the acquisition and buildout of existing and future data centres. EdgeCore utilized Partners Group’s initial capital commitment throughout 2023 to expand and start developing data centre campuses in Santa Clara, California; Ashburn, Virginia; Mesa, Arizona; and Reno, Nevada.
In January, EdgeCore closed the US$1.9 billion debt financing led by a consortium of coordinating lead arrangers including Mitsubishi UFJ Financial Group (MUFG), TD Securities, ING Capital, Scotia Bank, and Santander.
MUFG acted as a coordinating lead arranger, joint bookrunner, and administrative agent on the transaction. Davis Polk Watson served as legal counsel for the borrower/sponsor while Milbank advised the underwriters.
The Mesa campus boasts several energy efficiency and sustainable water management features such as an air-cooled design with an ultra-efficient closed-loop chilled water system, allowing the facility to achieve a benchmark water usage effectiveness rating of nearly zero and a power usage effectiveness rating far below the 1.50 industry average.
In view of these features, financing for the project was structured as a green loan in alignment with the latest Green Loan Principles published by the Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications & Trading Association. ING Capital acted as the sole green loan structuring agent.