DigiPlex issues largest ever data centre bond in the Nordic high yield market

DigiPlex issues largest ever data centre bond in the Nordic high yield market

DigiPlex has successfully issued a NOK 1.80 billion senior secured bond to gear up for continued rapid growth.

This bond will be one of the largest single issues in NOK to ever be listed on the Oslo Stock Exchange (“OSE”), and the substantial oversubscription is a clear testament to the credit story of DigiPlex.

DigiPlex has issued a senior secured bond of NOK 1.80 billion with maturity in April 2024 at a coupon rate of 3-month NIBOR plus 3.65% p.a. DNB Markets, part of DNB ASA, Norway’s largest financial services group, acted as sole bookrunner for the bond issue.

The bond proceeds will be used to refinance the two maturing bonds issued by DigiPlex Fet AS and DigiPlex Norway AS and to fund the Group’s continued growth as demand for data centres in the Nordic region is increasing.

Byrne Murphy, co-owner and chairman of DigiPlex said, “The strong investor interest is evidence of DigiPlex’s excellent track record and the exponential growth of the Group’s presence in the Nordics as well as its strong brand name in the industry built over 18 years of operations.

“We see an incredible growth potential in the Nordic region with the influx of international hyperscalers, and with this new bond, DigiPlex is gearing up to take yet another leap to capture these exciting market opportunities.”

Henning Sørlie, director, High Yield Origination at DNB Markets added,The bond issue saw a very broad appeal across the investor community and is among the largest NOK denominated high yield bond issues ever placed in the Nordic market.

“The well attended roadshow, strong reception and substantially oversubscribed book of this DigiPlex bond issue is the result of a solid company and issuer track record, high customer retention, very strong market presence in the Nordics, a high-quality management team coupled with reputable sponsors backing the company and a well-timed transaction hitting a very receptive market sentiment.”

This latest bond issue follows DigiPlex’s inaugural issue in 2014 of a NOK 500 million bond and in 2015 of a NOK 575 million bond, the first time a data centre company anywhere had used bond financing for the construction of a data centre from ground-up and the first time in Europe that a data centre company had issued a bond.

Byrne Murphy continued, “The market reaction to the offering was extremely positive with existing bondholders eager to not just roll over their existing positions but also to increase their subscriptions and new large local and international accounts coming in.

“The very low liquidity in the last two bond issues expresses the Group’s ability to deliver strong results and best-in-class services year after year – no one has wanted to sell their holdings.”

The Nordic advantage

The Nordic data centre market is one of the most active and attractive areas for development in the world, estimated to have reached the $7.0 billion mark at the end of 2018.

This has been driven in large part by development and build-out by hyperscalers such as Amazon, Google, Microsoft and Facebook.

The Nordics are seizing market share from the European FLAP-D region (Frankfurt, London, Amsterdam, Paris and Dublin) as hyperscalers look to capitalise on abundant renewable energy, reliable power supply, low energy prices, political stability and the potential for exceptionally fast time-to-market.

With hyperscalers leading the way, the Nordic Council of Ministers predicts that investments in Nordic data centres are set to double by 2025, corresponding to an installed annual capacity of 280-580 MW per year.

Byrne Murphy concluded, “The cool Nordic Region is Europe’s hottest data centre market: a firm deploying 100 megawatts over 20 years could save approximately $2 billion by placing their data centre in Sweden or Norway versus the UK.

“This bond issue further strengthens our ability to enable hyperscalers to quickly and seamlessly enter the Nordic market through a single data centre provider with an excellent track record.”