Switch, a provider of AI, cloud and enterprise data centers, closed on its $4.25 billion sustainability-linked borrowing base facility (BBF) and upsized its revolving credit facility (RCF) to $770 million.
Proceeds from the BBF, which consists of a $3.5 billion revolving credit facility and $750 million term loan, will primarily be used to fund the development of new projects totaling over $5 billion of total contract value across four campuses, as well as refinance a portion of the company’s existing acquisition debt incurred in connection with its take-private by DigitalBridge and IFM Investors in December 2022. The RCF will fund working capital and general corporate purposes. The recently completed transactions will support Switch’s bookings momentum across its base of enterprise, hyperscale and AI customers.
“The series of financings we have completed this year ideally position us for growth opportunities at the forefront of cloud, AI and enterprise, while affirming our commitment to sustainability,” Thomas Morton, president of Switch, said. “We are excited to enhance our liquidity position and support our robust development pipeline.”
“These transactions, in addition to the two successful ABS issuances earlier this year, are an important part of our overall capital formation strategy,” Madonna Park, chief financial officer of Switch, said. “Having access to multiple sources of capital will be important to support both our stabilized portfolio of assets as well as the continued development of our exascale campuses.”
The BBF will be sustainability-linked and align with sustainability-linked loan principles.
“This was a very successful syndication, with over 25 banks participating across both capital raises, and we were able to upsize the transactions by over 40%,” Jesse Burros, chief investment officer of Switch, said. “Combined with the depth of our development and sales pipelines, our relationships across the financial community are highly strategic, and we value the support shown on these and other financings.”
In connection with the BBF transaction, J.P. Morgan and TD Securities served as co-structuring agents and joint lead arrangers, with ING Capital and TD Securities serving as co-sustainability coordinators. TD Securities served as left lead arranger on the RCF transaction and is the administrative agent for both the BBF and RCF.
Milbank was legal advisor to Switch, and Paul Hastings was lenders’ counsel on the BBF and RCF transactions.
