The transaction is a securitisation of real estate and lease receivables, related to two data centres in Newport, in the United Kingdom. At the closing date in May 2024, the issuer, Vantage Data Centers Jersey Borrower SPV Limited, used the GBP 600.0m proceeds from the issuance of the class A-2 notes to refinance existing debt, fund several transaction reserves, finance third-party transaction costs. Furthermore, it may use the proceeds also for general corporate purposes, including the development of data centres. The class A-2 notes have an anticipated repayment date in May 2029 and a final maturity date in May 2039.

The proposed amendments include the following main changes: i) rationalisation of Vantage Data Centers group’s structure; ii) insertion of VDC CWL11 LandCo Limited (the ‘LandCo’) in the transaction; iii) issuance of up to GBP 200.0m further class A-2 notes and up to GBP 54.0m new class B notes by Vantage Data Centers Jersey Borrower SPV Limited.

As part of the group rationalisation, four corporate entities positioned above the issuer in the ownership structure will be removed. As a result, the issuer will become a direct subsidiary of Vantage Data Centers Jersey Limited.

The LandCo has purchased the freehold to the land on which the CWL11 data centre is located. Vantage Data Centers UK Limited, the owner of the data centres, continues to make headlease payments to the new landlord under the headlease, the LandCo. As part of the corporate restructuring, the LandCo will become a direct wholly owned subsidiary of the issuer and enter the transaction. It will become an obligor, the headlease payments will serve as a source of income related to the rated notes and it will grant security over its assets in favour of the trustee that represents the noteholders.

The proceeds from the issuance of the notes will be used for: i) full redemption of the class A-1 variable funding notes, which currently rank senior to the class A-2 notes in the pre-enforcement priority of payments; ii) repayment of the LandCo’s debt which was used for the acquisition of the freehold interest; iii) funding the liquidity reserve; iv) financing transaction costs; and v) financing general corporate purposes of the Vantage group.

Scope’s analysis only covers the credit impact associated with the amendments described above. Scope has not addressed other non-credit related effects that may be relevant for investors and/or counterparties when assessing the impact of said proposed amendments.

This announcement note does not constitute a Credit Rating Action, nor does it indicate the likelihood that Scope will conduct a Credit Rating Action in the short term. Information about the latest Credit Rating Action connected with this announcement along with the associated rating history can be found on www.scoperatings.com.