DayOne seeks US$1 billion loan to build data centres

DayOne is reportedly seeking a private credit loan of at least US$1B to build data centres. Could it be for a Singapore data centre?

Funds for expansion

First thing first, what of this latest proposed loan about? According to a Bloomberg report last week, DayOne Data Centers Singapore is looking for at least US$1 billion to fund its expansion plans.

• Option to upsize by US$250M with four-year tenor.
• Deal is still in early stages and subject to change.
• No official response to request for comment.

DayOne was formerly the international arm of GDS, with the rebranding happening in January this year.

More than one loan

It's worth noting that DayOne just a week earlier had secured US$3.54 billion to support capital expenditure for its data centers in Johor.

And the first week of June, DBS and UOB approved a US$411M loan to DayOne to finance a data centre campus in Batam.

So could the latest loan be for?

One cannot discount the possibility of a data centre in Singapore, considering reports of a purported loan by AirTrunk for an 80MW data centre in Singapore.

To be clear, these is speculation at this point.

Winners and losers

If there's one thing that's proven, it would be DayOne's blistering rate of growth. And it is hardly the only one expanding rapidly.

Beyond the public cloud giants, other names of data centre operators that frequently crop up include:

• PDG.
• Yondr.
• Nexera.
• AirTrunk.
• STT GDC.
• Bridge DC.
• Digital Realty.

But not everyone is getting a slice of the pie. Anecdotal reports I've heard tell of operators struggling to attract hyperscalers clients.

Not too bad if they are targeting non-hyperscalers too. But highly problematic if the business plan is predicated in such deals.

The result:

• Large capacity announcements.
• Exaggerated claims of future plans.
• More announcements.
• ... silence.

Sure, key struggle continue to revolve around securing power and water, getting the right location, and raising capital. It will for naught if there's no anchor customer in the door though.

In a market flush with capital and ambition, I suspect not everyone is finding a seat at the table.