(Nov 5): DayOne Data Centers has secured a HK$1.86 billion (US$237 million or RM960 million) loan to help finance a project in Hong Kong, according to people familiar with the matter, adding to a slew of funding deals for the Singapore company as it seeks to expand globally.
DBS Group Holdings Ltd, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank Ltd (UOB) provided HK$300 million each, while Bank of East Asia Ltd contributed HK$955 million, said the people, who asked not to be identified discussing private matters.
The five-year facility carries a margin of 152 basis points over the benchmark Hong Kong interbank offered rate, with a lower rate available if sustainability-linked targets are met, the people added.
The loan deal underscores DayOne’s efforts to push forward with artificial intelligence (AI) related projects amid global investors’ growing wariness about whether firms’ spending on AI-related infrastructure will pay off. The company also has been planning a US initial public offering, but is weighing its options, including a potential delay or size cut, as volatility around data centres increases.
Proceeds from the loan would also be used for refinancing, along with capital expansion for a Hong Kong data centre, the people said. The borrower is a special purpose vehicle, they added.
DayOne and DBS declined to comment. OCBC, BEA and UOB didn’t respond to requests for comments.
Despite concerns about the sector, the AI boom is still driving a wave of debt financing, with Moody’s expecting at least US$3 trillion of data centre-related investment over the next five years. Blackstone-owned AirTrunk, for example, secured a A$4.25 billion (US$3 billion or RM12.06 billion) green loan for a Sydney data centre campus, while Blue Owl Capital-owned Stack Infrastructure Inc. is seeking a A$8.6 billion facility for a project in Melbourne.
DayOne also has been in early stage talks with banks for a potential US$500 million bond offering. It closed half of a US$7 billion-equivalent loan — one of the largest AI-related borrowings in Asia earlier this year, while also obtaining a four-year S$530 million (US$414 million or RM1.68 billion) to develop its first data centre in Singapore.
Once an international affiliate of Chinese data centre operator GDS Holdings Ltd, DayOne was previously known as GDS International before rebranding last year. It has brought in international investors, including SoftBank Vision Fund, Coatue Management and Ken Griffin and closed a US$4.5 billion Series C funding round in June.
Apart from Indonesia, the company is operating or developing data centres in several places including Singapore, Malaysia, Hong Kong, Thailand and Finland, according to the company’s website.
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