ING reportedly seeks buyers for $500 mln in data center loans — CNBC

In the United States, Dutch bank ING is seeking bids from potential buyers for about $500 million in loans issued for 12 data centers, according to CNBC. The portfolio includes debt linked to the Stargate site in New Mexico.

Sale of the loan portfolio

SMBC global markets strategist Hank Calenti noted that investment banks typically use an “originate and distribute” model for such loans. Buyers may include private credit investors, asset managers, and insurance companies seeking higher returns from such assets.

According to Calenti, further sales by banks of loans related to AI data centers will depend on the balance between the discount at sale and the benefit of freeing up funds for new lending. He suggested that such deals could be common practice or indicate financiers’ intention to exit such assets before restrictions tighten.

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Concerns over AI financing

The potential sale comes amid concerns about the rapid growth of debt associated with building artificial intelligence infrastructure and the possibility of insufficient returns on these investments. JPMorgan Chase and Morgan Stanley had previously reportedly also considered options to reduce their credit exposure to data center construction, including the private sale of part of the debt to non-bank lenders and transferring part of the credit risk to investors.

Pruksa Iamthongthong, head of Asia-Pacific equities at Aberdeen Investments, said that following significant gains by Democrats in the U.S. midterm elections, concerns about closer oversight of data center development have intensified. In her view, short-term volatility may persist while the market assesses potential delays in U.S. data center construction and constraints on computing capacity.