Red Oak data center campus in Texas is adding 60 megawatts of incremental IT capacity through a $650 million financing upsize that will support construction of a fourth building on the site.
DataBank has strengthened its financial toolkit with two major financing deals that together add $1.45 billion to the company’s balance-sheet capacity, moves that accelerate construction at its large Texas campus and broaden its access to capital as demand for hyperscale and cloud-connected capacity grows.
What closed
An $800 million corporate revolving credit facility maturing in 2031. The revolver, arranged by a bank syndicate led by Citizens Bank and including Citibank, MUFG, PNC, TD Securities, Truist, U.S. Bank and Wells Fargo, will fund general corporate needs: working capital, capital expenditures and liquidity to support growth and acquisitions.
A $650 million upsize to the company’s existing Red Oak, Texas construction financing, bringing total committed capital for that campus to $2.65 billion. The upsized package supports a fourth building at the South Dallas campus and adds about 60 megawatts of incremental IT capacity. It includes $400 million of bank financing and $250 million of notes sold in DataBank’s first-ever private placement.
Why it matters
Faster build-out at Red Oak: The extra $650 million directly underwrites more physical capacity. Sixty megawatts is meaningful for a single new building. Enough to house multiple large cloud or enterprise deployments — and shows DataBank is moving beyond initial phases into fuller campus-scale buildout.
Diversified funding sources: The private placement is a milestone for DataBank. By accessing institutional note investors as well as traditional bank lenders, the company widens its investor base and reduces dependence on a single funding channel, which can lower execution risk on large development programs.
Improved liquidity for growth and M&A: An $800 million revolver gives management immediate flexibility to respond to customer commitments, opportunistic acquisitions, or cyclical working-capital swings without tapping equity or selling assets. For a data‑center operator competing for long-term, high-capacity contracts with hyperscalers and large enterprises, that optionality can be strategically important.
Market signal: Large, diversified bank syndicates and participation from placements signal confidence from both debt markets and institutional investors in DataBank’s business model and growth path. That matters in a sector where customers judge counterparties on scale, operational track record and balance-sheet strength.
Context in the data-center cycle
The data-center industry is capital intensive and cyclical, with developers often relying on layered financing. Construction loans, corporate credit lines, bond or note placements, and equity — to align funding with project milestones and customer pre-commitments. DataBank’s combination of an extended-term revolver and expanded construction financing follows a trend among mid-to-large operators to lock in liquidity. As hyperscale cloud providers and large enterprises push for rapid capacity ramp-ups. The private placement element also reflects growing institutional appetite for stabilized or near-stabilized data-center cash flows, especially as investors seek yield in a low-yield environment.
Risks and considerations
Execution risk on new building: Delivering the additional 60 MW on time and on budget depends on supply-chain stability, skilled labor availability, and permitting — variables that have caused delays across many recent infrastructure projects.
Leasing risk: The financing presumes demand for the incremental capacity; a slowdown in large multiyear commitments or longer leasing lead times could pressure returns. However, DataBank’s focus on hyperscale, cloud and enterprise customers suggests it will aim for pre-lease or long-term contracts to mitigate that risk.
Leverage and covenant exposure: While the revolver increases liquidity, it also adds to the company’s leverage profile when drawn. The structure and covenants of the revolver and construction loans will determine how much flexibility management retains under stress scenarios.
These transactions substantially deepen DataBank’s war chest to build out a major Texas campus while signaling broader investor confidence. For customers, it means more near-term capacity. For the company, a chance to pursue deals and scaling opportunities with less funding friction. The private placement, in particular, marks a shift toward more varied capital structures that other data-center developers may mirror as they seek durable financing for large, multibuilding campuses.
Additionally, DataBank’s Red Oak Campus expansion underscores rising investment in AI data center capacity. In a similar development, the Nakota AI Data Campus recently advanced through a strategic MOU between Tachyon9 Corporation and Nidar Infrastructure Limited, securing an anchor customer framework for its first 100 MW phase and reinforcing plans for a potential 1 GW buildout.
Factsheet: DataBank Closes $650M in Financing to Advance Red Oak Campus
DataBank, has announced the successful closing of two financing transactions totaling $1.45 billion.
Corporate Revolving Credit Facility
- $800 million facility maturing in 2031
- Uses: general corporate purposes, working capital, capital expenditures, and liquidity support for growth and acquisition strategy
- Arranged by Citizens Bank, N.A. (lead)
- Joint Lead Arrangers: Citibank, MUFG Bank Ltd., PNC Bank, N.A., TD Securities (USA) LLC, Truist Securities, Inc., U.S. Bank, N.A., Wells Fargo Securities
Red Oak Campus Financing Upsize
- $650 million upsize of existing $2.0 billion construction financing
- Brings total Red Oak campus financing to $2.65 billion
- Supports construction of fourth building, adding 60 megawatts of IT capacity
- Composition: $400 million in bank financing and $250 million in private placement notes
Private Placement Transaction
- First private placement for DataBank, marking significant milestone
- Opens company to new institutional investor base
- Diversifies sources of capital for development projects
- Lead Placement Agent: MUFG
- Joint Placement Agents: TD Securities (USA) LLC, Barclays
- Co-Placement Agents: Citibank, Citizens Bank, N.A., National Bank of Canada
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