Cloud Capital has closed a $520 million asset-backed securities deal tied to a single hyperscale data center in Northern Virginia. What’s turning heads in the industry, though, is the structure behind it: the company is calling it the first programmatic data center ABS Master Trust built around a core joint venture.
The financing sits behind an 80-megawatt facility leased to an investment-grade hyperscale tenant on a long-term contract. Size alone doesn’t explain the attention it’s getting. Three major rating agencies, Fitch, Morningstar DBRS, and Kroll Bond Rating Agency, all assigned it AAA ratings, the first time a data center ABS deal has pulled that off across all three.
Given how unsettled credit markets have been lately, the level of demand still stands out. According to Cloud Capital, the deal priced at the tightest spread for a data center ABS transaction since the Middle East conflict began earlier this year. The financing runs through the newly formed Cloud Capital ABS Master Trust, which backs the firm’s stabilized Core Joint Venture strategy, a partnership that includes Realty Income and an unnamed global institutional investor.
Hossein Fateh, Cloud Capital’s founder and CEO, called the Master Trust launch a defining moment for the company. He framed it as a repeatable source of long-term capital for future growth. Meanwhile, Jason Weaver, the firm’s head of capital markets, pointed to the breadth of institutional demand as proof the structure works, even during a difficult stretch for credit markets, and said it opens up more diverse funding sources at a lower cost of capital going forward.
Guggenheim Securities’ Matt Bissonette, who worked on the deal, credited the response to a combination of factors: premium assets, a long-duration investment-grade tenant, conservative structuring, and the new trust framework itself.
Proceeds will go toward expanding Cloud Capital’s Core Strategy. Guggenheim structured and led the deal as sole active bookrunner, while Deutsche Bank Securities and Morgan Stanley served as passive bookrunners.
