Represents Largest U.S. Data Center ABS Issuance since 2021
ST. LOUIS (July 10, 2023) – TierPoint, a leading provider of secure, connected IT platform solutions that power digital transformation initiatives, today announced the completion of an asset-backed securities (ABS) issuance to support the company’s continued growth and development, marking the largest ABS issuance in the U.S. data center sector since 2021. In the transaction, TierPoint issued term notes under its new Green Finance Framework, demonstrating the company’s commitment to operating in accordance with environmental and sustainability principles.
The offering significantly enhances the company’s investment grade credit profile, extends its debt maturities, lowers its long term cost of capital, and allows TierPoint to deploy more data center capacity to meet accelerating demand in current and new markets. Details include:
- A wholly owned subsidiary of TierPoint issued $835 million green ABS term notes, as part of a debut $1.06 billion entrance into the U.S. ABS market
- All the notes were rated investment grade at A- by Kroll Bond Rating Agency, including $835 million of term notes and $225 million of variable funding notes
- Financing was split into $360 million of term notes with a 3-year anticipated repayment date, $475 million of term notes with a 7-year anticipated repayment date, and $225 million of variable funding notes with a 5-year anticipated repayment date.
Net proceeds after transaction fees and expenses will be used to pay off the company’s senior secured term loan and revolver and for working capital.
“This financing achievement, in a challenging market, is a testament to the strength of our company, the resolve of our employees, and the growing demand for our world-class facilities and services,” said Jerry Kent, TierPoint Chairman and Chief Executive Officer. “The strengthening of our balance sheet positions us to respond to this market demand and continue providing a superior level of support to the thousands of clients that rely on us to power their digital transformation initiatives.”
TierPoint’s Green Finance Framework and the green ABS demonstrate a market-leading 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.
TierPoint sought an external review of its Green Finance Framework from leading ESG data provider Sustainalytics, which confirmed in its Second-Party Opinion the positive impact of the green program and relevance to TierPoint’s sustainability strategy. Full details of the Green Finance Framework, as well as the external review by Sustainalytics, are available on TierPoint’s website.
Guggenheim Securities, LLC acted as sole structuring advisor and joint active bookrunning manager for the securitized notes. Barclays Capital Inc. and TD Securities (USA) LLC also acted as joint active bookrunning managers for the term notes. ING Financial Markets, LLC acted as passive bookrunning manager and green bond agent. RBC Capital Markets, LLC acted as passive bookrunning manager. Citigroup Global Markets Inc., Fifth Third Securities, Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC were engaged as co-managers for the transaction. 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) 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. TierPoint also has one of the largest and most geographically diversified U.S. footprints, with dozens of world-class, cloud-ready data centers in 20 markets, connected by a coast-to-coast network.