Terremark Raises Money, Building More in DC Area

April 26th, 2010 by · Leave a Comment

Colocation and cloud services provider Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] announced this morning that it has begun construction of its third colocation facility at its NAP of the Capital Region, which sits 60 miles outside of Washington DC in Culpeper VA.  With 70% of the space in the first two facilities now spoken for and steady continuing demand, a further buildout was widely expected. 

The new facility will cost $45M initially, and will add 50,000 square feet to the company's footprint.  To fund the buildout, Terremark has sold $50M in debt, which they also announced today.  The 12% notes were priced at 112%, meaning that the effective interest rate is about 9.25%, which seems about right in today's credit market.  They will use the money for working capital and general corporate purposes, but the timing and amount basically peg this offering to the further Culpeper buildout.

Terremark has been relatively quiet lately, but I look for their profile to rise over the next few quarters following the absorption of sdxc by Equinix (NASDAQ:EQIX, news, filings).  The sector is very hot of course, but there just aren't that many ways to play it.  Terremark, and perhaps also Telx after its IPO, will help fill the gap left by the merger.

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Categories: Datacenter · Financials

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