Aligned Data Centers Issuer is preparing to sell $250 million in asset-backed securities backed by revenue from the trust's real property interests in seven data centers located in five states.
Aligned Data Centers Issuer, 2023-2 will be the fourth issuance from the master trust by its Nov. 24, 2023 closing date, S&P said. Series 2023-2 also shares collateral with Aligned series 2021-1, 2022-1, and the 2023-1 notes, and they are pari-passu with the series 2021-1, classes A1 and A2; series 2022-1 class A2; and series 2023-1 A2.
Guggenheim Securities is the sole structuring advisor on the deal, according to ratings analysts from S&P Global Ratings. S&P plans to rate one class of notes, the A2 notes, which have a Nov. 16, 2048 legal maturity date. Outside of that timetable, the series 2023-2, class A notes has a zero annual scheduled amortization and a five-year anticipated repayment date. The asset pool also includes tenant leases, reserves and escrows, certain transaction accounts and the equity interest in each of the asset entities.
KeyBank is servicer on the deal, which stipulates that the series 2021-1 class B notes are subordinate to the class A notes, according to S&P. As of the closing date the issuer will be permitted to draw on the class A1 variable funding note, up to $150 million.
The seven properties themselves are located in Plano, Texas; Phoenix, Ariz.; West Jordan and West Valley City, Utah; Ashburn, Va.; and one new data center in Chicago's Northlake area that will be added to the series at closing, according to S&P.
To boost credit to the notes, Aligned, series 2023-2 has a liquidity reserve account at closing, amounting to $53.89 million. It also benefits from a 2.00x cash trap and early amortization trigger, and a 1.25x three-month debt service coverage ratio (DSCR) levels.
Among the deal's other strengths, the current tenants in the data center properties are of high average credit quality, with 79% at investment-grade or equivalent. The pool also has low customer churn rates, a loan-to-value ratio that is constrained at 70.0% of the assets' appraised value at closing, S&P said.
