Aligned Data Centers has increased its sustainability-linked loan from $375 million to $1.75 billion to accelerate its next phase of growth, the company said this week. The additional $1.4 billion in funding provides Aligned with more resources to build data centers for its customers, including hyperscale operators that have set ambitious targets for reducing or eliminating their climate impact.
That’s why sustainable finance has become an important strategy for Aligned, matching the priorities of its largest customers while tapping into Wall Street’s interest in the intersection of digital infrastructure and sustainability
The additional funding arrives as Aligned is in expansion mode, having recently launched its Chicago data center campus and announced additional capacity in Phoenix and Salt Lake City. Last week Aligned said it will acquire land at Quantum Loophole’s massive project in Maryland, a big step toward expanding the company’s ability to serve the Northern Virginia cloud cluster.
In a sustainability-linked loan (SLL), the borrower earns a lower interest rate by hitting benchmarks for sustainable practices. It is among the financial products to help address ESG criteria (environmental, social and governance) in selecting targets for lending and funding.
Building on Existing Sustainable Financing
The Aligned SLL expands upon an initial loan last year, and consists of a $500 million 12-month delayed-draw term loan, a $750 million 24-month delayed-draw term loan, and a $500 million revolving credit facility. TD Securities, Wells Fargo Securities, and Citizens Bank, N.A. acted as joint bookrunners and joint lead arrangers for the facility. Aligned engaged ING Capital LLC as sustainability structuring agent and TD Securities as sustainability and administrative agent, and more than 20 banks supported the Company on the transaction.
“Leading financial institutions continue to support our objective to be the data center industry’s leading change agent for sustainability by providing access to, and increasing, our sustainability-linked financing to deliver on that mission,” said Andrew Schaap, CEO of Aligned Data Centers.
Sustainability has long been an emphasis for Aligned, which prioritizes efficiency and energy conservation in its wholesale and build-to-scale data center solutions. Recent headlines have brought climate risk to the fore, prompting customers to focus on eliminating fossil fuels from their IT footprint. Aligned said it has matched the entire energy footprint of its data centers with purchases of renewable energy.
“Green financing is an embedded element of Aligned’s industry-leading commitment to data center sustainability and environmental stewardship, and further supports our ability to innovate disruptively in pursuit of a climate-secure industry, and world,” said Anubhav Raj, CFO of Aligned. “Aligned’s latest increase to its sustainability-linked financing is a testament not only to the recognition of our relationship banks and financial institutions of the precipitous demand for digital infrastructure and services, but also of the singular demand for Aligned’s adaptive data center platform.”
Aligned builds “smart infrastructure” to solve capacity management challenges through innovation in cooling and the supply chain. Its offering is positioned to appeal to technology-focused customers, especially growing Internet companies.