Latin America Loan: Aligned’s US$1.225bn loan

IFR Awards 2023
3 min read
Rhys Adams

Financing the future

US technology infrastructure company Aligned used a financing package which blended the structures of an acquisition loan, a delayed draw term loan and project financing to fund its acquisition of Brazil-based data centre firm Odata and establish debt to be used for its further expansion.

The loan also had to contend with the complexities of working across multiple jurisdictions within Latin America and an uncertain size thanks to structuring based on the developments of offtaker contracts.

The US$1.225bn five-year loan comprised an acquisition portion and a delayed draw tranche to be used to further expand Odata’s operations in Latin America. The loan also contains provisions to be converted to a sustainability-linked facility once key performance indicators have been agreed upon. That conversion is anticipated, as Odata intends to use renewable energy to power its data centres.

The climate-conscious attitude of Odata is an essential consideration for the company’s major clients when they consider contracts for new data centres. Reliable power is paramount for the business as only 1.6 hours of downtime annually is generally accepted by clients, and the data centre’s power usage also impacts the client’s ESG strategies.

The Brazilian operations of Odata are already powered by wind-generated electricity.

The loan was exceptional, according to Alexandre Potiron, an associate at joint lead arranger and bookrunner BNP Paribas. “You’re acquiring a company that's a decent size, but then you're also financing the exponential growth of this company,” he said.

The financing of that growth was structured to require an outside party’s assessment before funds from the delayed draw term loan can be drawn.

“To be able to access that money, they need to show the lenders that they have a contract with certain offtakers, so we need to see a name such as Microsoft or Google …Then that contract needs to have a certain tenor, then they need to show the business plan – how the data centre they construct will fulfil the contract. Once they’ve done that, we’ll have an independent engineer or committee take a look,” said Potiron.

That structure is different from a project finance loan, he said.

“Usually you have a contract in place and you finance what you know. Here, you’re financing things you don’t know about that will occur in the future.”

The loan, which went through several iterations during structuring due to the addition of new data centre contracts, is also expected to be increased well before maturity.

“Based on the pipeline they have, it’s possible this facility will be upsized in the coming years,” said Potiron.

Bookrunners were BNP Paribas, Credit Agricole, Deutsche Bank, MUFG, Nomura, Societe Generale and SMBC.

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