Netrality Data Centers Secures $380M Sustainability-Linked Loan to Support Energy-Efficiency
The SLL will fuel data center expansion projects that embody sustainable designs and implement infrastructural measures to support the reduction of power usage effectiveness ("PUE") levels across Netrality's portfolio.
MIAMI BEACH, Fla., Nov. 28, 2023 /PRNewswire/ -- Netrality Data Centers, the largest, privately held owner and operator of core interconnection facilities in the U.S. announced it has secured a $380 million sustainability-linked credit facility ("SLL"). J.P. Morgan acted as the Administrative Agent, Joint Bookrunner and Joint Lead Arranger while Societe Generale and TD Securities (USA) LLC acted as Joint Bookrunners, Joint Lead Arrangers and Sustainability Structuring Agents. In addition, Huntington Bank acted as Managing Agent. Goldman Sachs was also a lender in the facility.
The SLL will fuel data center expansion projects that embody sustainable designs and implement infrastructural measures to support the reduction of power usage effectiveness ("PUE") levels across Netrality's portfolio.
The SLL is comprised 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 will be externally verified by third parties.
The SLL reinforces Netrality's mission to enhance the energy efficiency of its existing data halls and sustainably add new data halls — equipped with robust network architectures and energy-efficient infrastructure that meets 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. Cognizant of the environmental impact of its operations, 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 cooling and liquid cooling technologies, artificial intelligence "AI" enabled cooling software, high-efficiency UPS and electrical distribution upgrades, renewable energy purchases, and smart LED lighting to drive greater environmentally responsible energy usage.
Gerald M. Marshall, President and Chief Executive Officer of Netrality, said, "We are thrilled to announce the successful closing of a sustainability-linked loan, marking a significant milestone in our journey toward a more sustainable future. 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."
Josh Maes, Chief Operating Officer of Netrality added, "The objectives outlined in the sustainability-linked loan align seamlessly with our broader environmental, social, and governance ("ESG") strategies — implemented to support the sustainability initiatives of our stakeholders, from our valued customers to our debt and equity investors. This commitment underscores our dedication to operate in harmony with ESG principles and prioritize our environmental stewardship."
Lana Feteiha, of Societe Generale's Sustainable Finance team said, "This was an especially gratifying deal for Societe Generale to work on, partnering with a leading data center company on a financing solution that will spur the expansion of critical technology infrastructure in a more energy efficient, sustainable manner."
"TD Securities was pleased to support Netrality as a Sustainability Structuring Agent on the sustainability-linked credit facility. Decarbonization of digital infrastructure is critical to advancing the low-carbon economy and Netrality's commitment to creating sustainable data center environments furthers this objective," Amy West, Global Head of ESG Solutions, TD Securities, commented.
The SLL marks Netrality's second sustainability-focused loan. On January 11th, 2023, 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, which has been designed for energy and water conservation, at Netrality's KC2-7801 Nieman Road facility in Shawnee, Kansas.
Netrality's facilities are located where the densest long-haul fiber optic networks and metro-fiber intersect — offering customers interconnectivity, rapid data transmission, network diversity, and global reach. The recent sustainability-linked financing expands Netrality's ability to deliver always-on connectivity for latency-sensitive, mission-critical businesses within an environmentally conscious framework.
Andrew Weisberg, Kerrick Seay, and Chiara Eramo of White & Case LLP, represented Netrality Data Centers in the transaction.
Stephen Miklus, Skip Sullivan, and Heena Wozny of Morgan, Lewis & Bockius LLP represented the lenders under the SLL.
About Netrality Data Centers
Netrality Data Centers owns and operates strategic interconnection data centers and Meet Me Rooms, providing a mix of colocation, powered shell, and wholesale data center solutions driven by fiber-dense, network-rich interconnection environments. Today, Netrality's eighteen properties span 3.3 million square feet and over 100 megawatts of capacity across North America.
Well-capitalized with a long-term investment from Macquarie Asset Management, Netrality is the largest privately held owner-operator of core interconnection facilities in the United States. Netrality acquires strategically located core network interconnection data centers that provide best in market network resiliency, ensuring always-on connectivity for latency-sensitive and mission-critical businesses. For more information: www.netrality.com, LinkedIn, Twitter.
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