Fitch Ratings published an exposure draft June 24, 2025, of its ratings criteria to analyze single-borrower data center securitizations issued in both the commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS) markets.
Data center growth is accelerating, fueled by artificial intelligence, cloud computing and digital infrastructure, and the increased need for data storage, processing and retrieval. Precedence Research estimates the total market size to reach $386.71 billion this year, up from $347.64 billion in 2024, and to exceed $906 billion by 2033.
Fitch notes that data center securitizations have occurred in both the CMBS and ABS markets, and while their collateral attributes may be identical their structures can differ.
"The exposure draft of the criteria report combines these analyses into one comprehensive and unified asset approach," Fitch says.
Fitch adds that its rating determination will depend on whether the collateral can be readily sold to pay down rated debt, assuming liquidation is the optimal path to note redemption.
"Like much CMBS, some ABS data center transactions can be secured by property that may be sold and the sale proceeds used to repay outstanding obligations," Fitch says.
It adds that transactions relying solely on cash-flow rights rather than sale proceeds will require additional analysis of long-term rating case cash flows and paydown dynamics for note redemption ahead of legal final maturity.
Fitch says it currently rates no ABS data center deals and a few offerings under its existing CMBS Large Loan Rating Criteria, which the exposure draft closely follows. The rating agency adds there is no rating impact from the proposed criteria. Comments are due on the exposure draft by August 25.
Fitch's move follows the release in February of a ratings methodology for data center securitizations by the structured finance group at Moody's Ratings, which had previously rated data center securitizations through its project finance and REIT teams.
In a January report, the rating agency noted foreseeing substantial growth for the data center industry in 2025, driven by technology giants including Microsoft, Amazon, Google, Facebook, Meta and Oracle rapidly building and leasing new data centers.
