According to a news report from Alliance News, Digital 9 Infrastructure PLC on Monday said it signed a USD$100 million green loan debt facility for Verne Global Iceland, the colo data center services provider, with a fixed-term of five years maturing in June 2028.
According to the story by Greg Rosenvinge of Alliance News, this includes an uncommitted $50 million accordion provision for Verne Global, while the interest rate payable in the first three years of the facility is 3 percent per year, increasing to 3.25 percent and 3.50 percent in the fourth and fifth year respectively.
Digital 9 is a London-based investor in digital infrastructure, while Verne Global is an Icelandic data centre that is wholly powered by renewable energy.
Digital 9 said Verne Global Iceland is “experiencing sustained and accelerated customer demand for its facilities from both new and existing customers” under Digital 9’s management and capital investment made to date.
The facility will be used to help fund Verne Global Iceland’s growth capital expenditure pipeline, partly repay outstanding shareholder loans owed by Verne Global Iceland to Digital 9, and refinance Verne Global Iceland’s existing bridge loan facility.
As part of its annual five-year business plan, Verne Global has identified a growth capital expenditure pipeline of around GGBP391 million for the five-year period to December, 31 2027 to expand the capacity of its data centre campus to over 96 megawatts from 40 megawatts.
Digital 9 noted previous announcements that it was exploring “complementary sources of growth capital”. This included considering structured long-term debt at an investee company level and a potential syndication of a minority stake in existing investee companies to strategic capital partners.
As a result, Digital 9 said it has initiated a competitive process to syndicate a minority stake in the Verne Global group of companies, including its operating sites in Iceland, Finland and the UK to strategic capital partners.
Digital 9 also noted its “diversified, high-quality” portfolio of nine data centre, subsea fibre, wireless and terrestrial fibre assets continued to perform strongly during the first quarter of 2023, in line with management expectations.
“The transaction represents an important step in our strategic plan to deliver complementary sources of growth capital and support our investee companies. As our portfolio matures, our borrowing policy allows us to evolve our investee companies’ capital structure, ensuring the company follows a disciplined capital management approach,” said Digital 9 Chair Phil Jordan.
“Verne Global has executed a green financing framework within the facility requiring compliance with ambitious sustainability metrics and market leading eligibility criteria underpinning the use of proceeds. Not only will D9 benefit from higher returns through investment into our existing assets compared to making new acquisitions, but the facility will also enable Verne to pursue its significant expansion plan in a highly sustainable manner and is testament to Verne and D9’s commitment to [environmental, social and governance] and sustainability.
