QTS lands $3.25B loan, tripling initial target as data center demand surges

What's the deal? Quality Technology Services (QTS) has closed a $3.25 billion leveraged loan, sources say. JPMorganDealroom has a profile for this one. Try Dealroom → led the seven-year term loan B as administrative agent, joined by bookrunners Morgan StanleyDealroom has a profile for this one. Try Dealroom → and Wells FargoDealroom has a profile for this one. Try Dealroom →.

The terms: The loan priced at S+225, with a 0% floor and an original issue discount of 99.5 — the tight end of price talk at launch. The facility, dubbed Project Magnolia, was upsized twice from an original $1 billion.

Where the money goes: QTS will use proceeds to repay debt under construction credit facilities, fund a debt service reserve account, and for general corporate purposes.

Why now? QTS builds and operates data centers that house the servers behind cloud computing and artificial intelligence. Blackstone acquired the company in 2021, and demand for data center capacity has driven heavy borrowing across the sector.

The signal: At $3.25 billion, this ranks among the largest US debt rounds in its category, sitting in the top 1% of comparable deals. The scale — and the fact that the loan tripled its initial target — underscores how much capital data center operators are drawing to keep pace with AI-driven growth.

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