(WEB HOST INDUSTRY REVIEW) — Data center operator DuPont Fabros Technology (www.dft.com) announced on Wednesday it will secure funding so that it can complete massive data center projects in Virginia and Silicon Valley.
DuPont says it plans to sell at least 11 million shares of common stock, as well as announced the closing of an unsecured $85 million line of credit.
This is the second round of financing DuPont Fabros has announced in six months. In December, the company closed on a $150 million secured loan to fund the construction of its ACC5 data center in Ashburn, Virginia.
At the current market price, the stock sale could raise about $264 million, with an additional $40 million to be raised through overallotment sales.
The company will use the proceeds from the stock sale to build its new ACC6 data center in Ashburn, Virginia, as well as its first Silicon Valley facility, SC1, in Santa Clara.
The two markets both have a relatively short supply of wholesale data center space available. They are also home to recently acquired data centers from wholesale data center competitor Digital Realty Trust, with two data centers in Santa Clara and two in Virginia.
“We firmly believe that demand for our highly quality wholesale data centers remains promising in all our markets, Hossein Fateh, president and CEO of DuPont Fabros, said in a recent earnings call. “We continue to remain a development growth story. We like Santa Clara and believe the market remains very good in this area. It is a logical next new development for us. Northern Virginia continues to experience a shortage of supply and in the near term, we don’t see rents softening for the quality of data centers we bring to the .”
The company is also building its next data center in Piscataway, New Jersey.
The company estimated that the construction of phase 1 for both ACC6 and SC1, which would each span 360,000 square feet and 26MW, would require a total investment of $350 million.
The $85 million line of credit can be potentially expanded by $15 million based on certain conditions. And since the loan is unsecured, the company did not have to pledge any of its data centers as collateral.
For the company’s line of credit, KeyBank National Association acted as administrative agent, KeyBanc Capital Markets acted as the sole lead arranger and sole book manager, and Royal Bank of Canada acted as the syndication agent.
Meanwhile, the stock sale was handled by joint book-running managers KeyBanc Capital Markets, Raymond James, Macquarie Capital, RBC Capital Markets and Jefferies & Company.
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