DataBank ABS transaction draws KBRA ratings on 2026-2/3/4 notes

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DataBank ABS draws KBRA ratings

Highlights

KBRA assigns ratings to DataBank Issuer, LLC's Series 2026-2, 2026-3, and 2026-4 notes, forming the co-issuers' sixth ABS issuance with increased collateral pool.
Series 2021-2 Notes are being repaid and withdrawn, while KBRA affirms ratings on Series 2021-1, 2023-1, 2024-1, and 2026-1 amid new issuance.
The collateral pool comprises 38 data centers generating $555.2 million annualized monthly recurring revenue and $312.2 million adjusted net operating income as of June 2026.

Transaction scope and rating actions

As reported by Kroll Bond Rating Agency, KBRA assigns ratings to three classes of notes issued by Databank Issuer, LLC and Databank Co-Issuer, LLC under Series 2026-2, Series 2026-3 and Series 2026-4, which together form the sixth ABS issuance from the co-issuers. All series share the same collateral pool, which is being increased with additional collateral on the closing date of DataBank 2026-2/3/4, and KBRA says its analysis incorporates all prior debt issuance of the co-issuers.

In connection with the new notes, the Series 2021-2 Notes are being repaid and their ratings are being withdrawn. At the same time, KBRA is affirming ratings on the outstanding Series 2021-1, Series 2023-1, Series 2024-1 and Series 2026-1 notes alongside the issuance of the new series.

Portfolio cash flow and sector exposure

The notes are secured by 38 data centers that generate about $555.2 million of total annualized monthly recurring revenue and roughly $312.2 million of annualized adjusted net operating income as of June 2026, the statistical disclosure date. The collateral pool includes fee simple ownership interests in 24 multi-customer enterprise data centers, accounting for 76.4% of AANOI across 10 markets, and leasehold interests in 14 facilities, accounting for 23.6% of AANOI across 12 markets.

The portfolio totals approximately 1.74 million square feet of data center space and provides around 287.2 megawatts of critical load power to customers. As of the statistical disclosure date, it serves 1,851 unique customers under separate contracts with a weighted average remaining term of 2.6 years, excluding renewals.

Customer concentration remains relatively diversified, with the largest customer representing 3.6% of AMRR and the top 20 customers accounting for about 37.0%. The customer base spans 73 industries, led by technology at 30.3% of AMRR, artificial intelligence at 9.1% and computer software at 7.3%, underscoring the transaction's exposure to digital infrastructure demand in the U.S. market.

In our earlier coverage of the U.S. AI data center boom, we highlighted how rising funding costs, construction delays, and power constraints are making many large-scale projects harder to deliver on time and on budget. We noted that only a minority of planned developments were viewed as credible, while investor confidence has been pressured by cost overruns and growing local and grid-related hurdles for new sites.

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