KBRA Assigns Preliminary Ratings to TierPoint Series 2023-1 and Series 2023-2

KBRA assigns preliminary ratings to three classes of notes from TierPoint Issuer, LLC and TierPoint Co-Issuer, LLC Series 2023-1 and Series 2023-2, a data center securitization that is primarily collateralized by fee ownership and leasehold interests in commercial real estate properties and the related customer contracts for data centers across the US.

This transaction represents the first securitization by TierPoint, LLC (TierPoint or the Manager) and is secured by 31 data centers generating approximately $397.2 million of Total Annualized Monthly Recurring Revenue (Annualized Revenue or AMRR) and approximately $198.3 million of Annualized Adjusted Net Operating Income (AANOI) as of November 2022 (the Statistical Disclosure Date). This includes fee simple ownership interests in nine multi-customer enterprise data centers (37.1% of AANOI) located in eight markets and leasehold interests in 22 multi-customer enterprise data centers (62.9% of AANOI) located in 15 markets. The 31 data centers are comprised of approximately 584,376 square feet (sf) of data center space and can provide approximately 63.5 megawatts (MW) of critical load power to customers.

The data center colocation customers use the space for power, space, and cooling of their data center equipment, cloud services as well as managed solutions, business continuity and other professional services. As of the Statistical Disclosure Date, a total of over 2,900 unique customers are subject to approximately 8,900 contracts, with the top 20 customers comprising approximately 20.7% of Annualized Revenue.

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Related Publications

• US CMBS Property Evaluation Methodology
• US CMBS Single Borrower & Large Loan Rating Methodology
• General Global Rating Methodology for Asset‑Backed Securities
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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