AirTrunk’s Rumoured USD Bond, Neoclouds and Private Credit Financing

The APAC market is alive with rumours of Blackstone-backed Australian data center operator AirTrunk eyeing a USD bond. Investment bank-led investor meetings have fuelled speculation, with discussions of potential debt structures that, according to sources, have included an unsecured corporate-level USD bond.

At this stage, banks are merely sounding ideas and gauging appetite, and no mandate has been awarded. The gossip is also rather confusingly mixed in with AirTrunk’s existing plans to diversify funding.

Octus reported as far back as February 2025, shortly after Blackstone completed its $24 billion buyout, that AirTrunk was looking to diversify its funding base through refinancings along with debt raises to meet expansion plans. Instruments under discussion included U.S. private placements, asset-backed securitizations and, ultimately, public bonds.

The rumours of a USD bond are inevitable. AirTrunk is expansionist, and in continual discussions about borrowing instruments with investors who have real appetite to lend into the sector.

An AUD 500 million asset-backed securitization has already been reported in the making, with Deutsche Bank appointed to lead. AirTrunk’s Malaysia assets are floated as possibly backing a separate bond, per sources.

Until now, AirTrunk has comfortably tapped the APAC commercial bank loan market to meet its needs. The company had substantial bank support developed under its prior Macquarie ownership, and that bank group travelled with it into the new Blackstone ownership. Bank appetite for the name remains solid, particularly since regional loan market volume is down about 20% for the year, and the few deals to be had are dominated by refinancings, amend and extends, and regional borrowers’ preference for low-cost local currency lends and bilateral loans.

In that context, data center lending is a no-brainer. Commercial banks have the knowledge and experience to structure and price data center operators as project finance type transactions. The typical cycle sees a developer raise a full-recourse, senior secured facility to fund land acquisition and permitting, then refinance into cheaper, limited-recourse project debt once hyperscaler or colocation contracts are signed and future cash flows are secured. That contracted, investment-grade-tenant, long-lease profile mirrors the conventional infrastructure and utility lending banks already know how to underwrite, which is why regional lenders with deep balance sheets and local relationships have built dedicated data center desks and are willing to lead syndications at real scale.

Loan pricing is also a sweet spot for established borrowers like AirTrunk, whose latest AUD 4.3 billion loan for the build-out of an Australian data center offers an all-in in the low 200s over base rate and is backed by seven lead banks.

AirTrunk did not respond to request for comment

Private Credit’s Role

One area where private credit gets a look-in on data center financings is as replacement equity on data center developments. Stack Infrastructure’s recent syndicated loan financing illustrates the mechanism: alongside an AUD 2.9 billion senior secured green project loan for its Melbourne build-out, arranged through a bank syndicate, the Blue Owl-backed operator separately syndicated a AUD 350 million holdco loan targeted at institutions.

Private credit capital’s flexibility was also to the fore when high-profile investors in DayOne Data Centers, Hillhouse and Boyu Capital, needed to raise money against their shares to avoid dilution during a Series C equity earlier this year, as Octus reported.

Arguably, the funding of data center construction in APAC is a cycle behind the US and Europe, where the market has moved further into capital markets financing via asset-backed and commercial mortgage-backed securitisations. According to jdsupra.com, in the U.S., ABS and CMBS issuance backed by data centers has grown from a standing start in 2018 to tens of billions of dollars a year, with sizeable, mature single-jurisdiction portfolios able to access securitisation once they have a stabilised, revenue-generating asset base and established hyperscaler tenancies. Europe’s first data center ABS priced only in 2024, with further transactions following since. In APAC, banks still anchor the senior debt across the region.

Neocloud operators, particularly when they are small or mid-sized and in the process of scaling up, present opportunities for private credit rather than banks, who face compliance or risk assessment barriers. Bitdeer Technologies Group, the Nasdaq-listed bitcoin miner turned AI infrastructure operator, is in early-stage talks with private credit investors for new financing, having already priced five convertible note offerings in eighteen months to raise more than $1.7 billion for data center construction, ASIC chip development and GPU cloud capacity, as Octus reported. Zettabyte, the Taipei and Palo Alto-based GPU infrastructure software startup, is likewise in early-stage discussions with Asia-based private credit investors, having so far funded its build-out through strategic rounds from Foxconn, Wistron, Pegatron, BRV Capital and Headline Asia, according to Octus reporting.

The sheer scale of AirTrunk’s expansion plans and the need to diversify its funding options make gossip about a USD bond almost inevitable. AirTrunk’s footprint already spans Australia, Singapore, Hong Kong, Japan and Malaysia. In June it announced plans to invest more than $30 billion in India by 2030 to expand digital infrastructure. It is pursuing a Singapore REIT listing that could raise about $1.5 billion, and has entered the Middle East through a $3 billion partnership with Saudi Arabia’s Humain to build data centers.

Expansion at that pace and across that many markets means that diversifying debt sources is less about opportunism than it is about necessity.