TierPoint Completes New $550 Million Securitization Financing

New Financing Raises Total Asset-Backed Securities to $1.61 Billion

ST. LOUIS (May 8, 2024) – TierPoint, a leading, national enterprise data center company and provider of secure, connected IT platform solutions that power digital transformation initiatives, today announced the completion of a new $550 million asset-backed securities issuance to support the company’s continued growth and development. 

Through a wholly owned subsidiary, the company has now issued a total of $1.61 billion in asset-backed securities (ABS), inclusive of the new $550 million issuance and $1.06 billion issued in 2023. Last year’s ABS issuance was the largest in the U.S. data center sector since 2021. Like last year’s transaction, the new term notes were issued under the company’s Green Finance Framework, demonstrating TierPoint’s ongoing commitment to operating in accordance with environmental and sustainability principles.

The new offering further enhances the company’s investment grade credit profile (of which over 90% is rated A-), extends its debt maturities, lowers its long term cost of capital, and allows the company to deploy more data center capacity to meet accelerating demand in current and new markets. All the notes were rated investment grade by Kroll Bond Rating Agency and have a 30-year legal maturity, including $425 million of Class A notes rated A-, with a 6.1-year anticipated repayment date, and $125 million of Class B notes rated BBB-, with a 5-year anticipated repayment date.

Net proceeds after transaction fees and expenses will be used to redeem the entirety of the company’s senior preferred equity, reduce the company’s overall cost of capital, and reduce the balance outstanding under its variable funding notes.

“TierPoint is experiencing exceptionally strong demand for its cloud and data center solutions, including our market-leading, enterprise and high-density colocation services, which are required for artificial intelligence and other compute-intensive, GPU-accelerated workloads,” said TierPoint Chairman and CEO Jerry Kent. “This new financing further positions us to answer that demand and continue providing cutting-edge service, support, and reliable operations, with 100% uptime of critical systems achieved in 2023.”

TierPoint’s Green Finance Framework and the two, green ABS issuances demonstrate a world-class commitment to aligning business growth and sustainability with transparency. The framework aligns to the core components of the International Capital Market Association (ICMA) Green Bond Principles, as well as the Green Loan Principles. These principles are voluntary guidelines to ensure consistency and transparency across the Green Bond and Green Loan markets globally, including requirements for the issuer to allocate an amount equal to the green ABS proceeds to support the financing or refinancing of Eligible Green Assets with clear and positive environmental impact. Full details of the Green Finance Framework, as well as an external review by Sustainalytics, are available on TierPoint’s website.

Guggenheim Securities, LLC acted as sole structuring advisor and lead placement agent for the securitized notes. Barclays Capital Inc. and TD Securities (USA) LLC also acted as joint placement agents for the term notes. ING Financial Markets, LLC and J.P. Morgan Securities acted as passive bookrunners. Simpson Thacher & Bartlett LLP served as counsel to TierPoint and Latham & Watkins LLP as counsel to Guggenheim.

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About TierPoint 

TierPoint (tierpoint.com) has one of the largest and most geographically diversified U.S. enterprise data center footprints, with dozens of world-class, cloud-ready data centers in 20 markets, connected by a coast-to-coast fiber network. TierPoint also is a leading provider of secure, connected IT platform solutions that power the digital transformation of thousands of clients, from the public to private sectors, from small businesses to Fortune 500 enterprises. Taking an agnostic approach to helping clients achieve their most pressing business objectives, TierPoint is a champion for untangling the complexity of hybrid, multi-platform approaches to IT infrastructure, drawing on a comprehensive portfolio of services, from public to multitenant and private cloud, from colocation to disaster recovery, security, and more.