Spotlight: The top lenders behind LatAm's leading datacenter groups

Investments in Latin America’s datacenter market remain steady, with funds, asset management groups and real estate investment players either participating or positioning themselves to participate.

Despite rising interest rates potentially hurting profitability in some of the biggest data markets in the region, such as Brazil, the overall prospect is for capital inflows to continue to support growth opportunities around AI and the cloud.

From a financial perspective, the market remains attractive, with existing players preparing to exit successful and high-value portfolio companies and others preparing to step in, BNamericas has learned.

Most of the hyperscale and colocation datacenter providers operating in the region remain well-funded with their latest raises, yet new issuances, including green bonds as well as new allocations from investors will be necessary in the near term to support upcoming projects.

But who exactly is financing these players? Who are the main lenders behind the leading datacenter groups in Latin America?

BNamericas takes a look at who's pouring in the money and where.

Scala

Scala Data Centers' main investor is DigitalBridge. 

Yet, the US digital infrastructure fund mandated Deutsche Bank to sound the market out about the company, as it looks for new investor partners or to exit Scala, BNamericas has learned.

The bank was one of the underwriters of a 1.65bn-real (currently US$302mn) bond issued in March 2022 by Highline do Brasil, a portfolio company owned by DigitalBridge.

Contrary to what it may seem, DigitalBridge is not looking to get rid of an underperforming asset but would be seeking to deliver a much more valuable and market-leading company than the one it found when it made its initial investment, still as Digital Colony over four years ago.

Since early 2023, DigitalBridge has secured external investment for its portfolio companies Vantage, DataBank and Switch.

In Latin America, Scala is on track to end 2024 with some 300MW in booked capacity, up from 130MW last year, according to a company source, in addition to a much bigger load planned for the coming years.

When it started in 2020, with then Digital Colony's acquisition of UOL's datacenter operations to create Scala, the operational portfolio was a little more than 17MW.

Considering a value of US$18-20mn per MW in recent similar global transactions, Scala's equity value would be well over the US$2bn initially speculated in the market for the asset, rather standing in the US$5-6bn range, according to a source.

In addition to DigitalBridge, its other investors are the International Finance Corporation, a branch of the World Bank Group, and the Olayan Group, a multinational company with a multibillion-dollar global investment portfolio. In 2021, DigitalBridge secured US$100mn from IFC for Scala’s projects.

Other lenders and financial backers of Scala include Coatue and IMCO, from whom Scala recently secured US$500mn.

Scala also issued green bonds in 2023 and 2024, with coordinators and participants including Bradesco BBI, UBS BB, Santander and Itaú BBA.

Odata

Founded in 2015 by Brazilian asset manager Pátria Investimentos, Odata was sold in 2023 to US group Aligned Data Centers.

Aligned is owned by funds managed by Australia’s Macquarie Asset Management and by BlueMountain Capital Management. Odata, for its part, was 90% controlled by Pátria with a 10% stake belonging to US datacenter real estate investment trust CyrusOne.

In 2022, funds KKR and GIP closed the acquisition of CyrusOne for US$15bn.

In connection with the acquisition of Odata, Aligned entered into a definitive agreement to receive a “structured minority investment” in Odata from funds managed by SDC Capital Partners. 

SDC is a digital infra firm focused on developing, owning and operating hyperscale datacenters globally, including in Latin America.

In fact, among New York-based SDC’s reported investments are Brazil’s Ascenty, whose leading controllers are Digital Realty and Brookfield Infrastructure Partners.

SMBC, MUFG, Deutsche Bank, Nomura, BNP Paribas, Societe Generale, Credit Agricole, and Natixis, among others, are financing Aligned and Odata with a US$1.22bn loan, with pre-defined drawdowns over the long term.

In 2021, Odata signed a US$30mn investment tranche with IFC, focused on its consolidation in Brazil and, in 2022, a new tranche worth US$35mn to support its expansion in Mexico. However, IFC is not currently part of Odata's current group of creditors.

ODATA also approved a financing line with Brazilian development bank BNDES in the past, but that line was not used.

Ascenty

Last October, Ascenty, Digital Realty’s Latin America colocation JV with Brookfield, secured US$170mn in a new financing round to support its operations in Chile. MUFG Bank, Natixis (New York branch) and The Bank of Nova Scotia were the lenders.

The financing also included Philippi Prietocarrizosa Ferrero DU & Uría Chile (PPU) advising Nova Scotia as administrative agent. 

Previously, in March last year, Ascenty raised over US$1bn in funding for a five-year term through two instruments, mainly focused on its Brazilian operations.

The first of those was an overseas term loan facility worth US$825mn, led by Itaú, Natixis, Nova Scotia, Credit Agricole, Banco MUFG Brasil and Mizuho.

The second involved issuing debentures in the Brazilian market for an amount equivalent to US$200mn, led by Bradesco. The securities were issued in reais and swapped for dollars.

In 2017, funds managed by Blackstone Tactical Opportunities and SDC had made an equity investment in Ascenty to support its growth plans.  

Equinix

Equinix's hyperscale projects (the xScale datacenters) are largely funded with resources from Singapore's sovereign wealth fund GIC and, more recently, the Canada Pension Plan Investment Board (CPP Investments).

Equinix has a longstanding relationship with GIC, having previously partnered on xScale projects in Asia, the Americas and Europe through a JV. 

Last month, Equinix expanded that to bring in CPPI with the aim of raising another US$15bn in capital together with the partners for expansion and new hyperscale projects.

Known lenders include Bank of America, Citibank, JPMorgan Chase, MUFG Bank, RBC Capital Markets, Goldman Sachs and HSBC Securities. 

Also involved were Barclays Bank, BNP Paribas, Deutsche Bank, ING Bank, Morgan Stanley Senior Funding, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia and TD Securities, among others.

Kio Networks

Mexico’s Kio Networks is controlled by US fund I Squared Capital. 

The Miami-based parent completed its takeover of Kio in 2021, through its ISQ Global Infrastructure Fund III and ISQ Growth Markets Infrastructure Fund.

IFC is also an investor, having made a US$30mn equity investment in Kio through some of these funds.

I Squared Capital has expanded its presence in Latin America in recent years, targeting mostly the energy, traditional infrastructure and digital infrastructure sectors. 

In addition to Kio, I Squared recently announced a US$400mn investment in Brazilian renewable energy company Órigo Energia.