Blackstone-backed QTS Realty Trust LLC is looking to secure $2 billion in financing, with a primary focus on a $1 billion term loan. This loan is being marketed at an interest rate of 2.25 to 2.50 percentage points above the benchmark, and offered at a discounted price of 99 to 99.5 cents on the dollar. The capital raised from this endeavor is intended to repay debt associated with QTS's US data centers and to issue dividends to its parent company, Blackstone Inc. This move is indicative of private equity owners tapping into the robust leveraged loan market to distribute funds to themselves, a practice known as a dividend recapitalization.
The demand for such financing in the data center sector has been significant. Previously, in April 2026, QTS secured $4.6 billion through a debut high-grade bond sale to fund a data center in Fayetteville, Georgia, which will house servers for companies like Microsoft Corp. That bond offering saw peak demand of approximately $12.5 billion, highlighting strong investor interest in data center-related assets. QTS has also been in discussions with banks to secure about $2 billion in guarantees for electricity fees owed to utilities, aiming to involve up to a dozen banks in this arrangement.
Blackstone's QTS has been actively pursuing diverse funding strategies to support its rapidly expanding data center operations, especially those catering to artificial intelligence (AI). The current $2 billion financing effort, including the $1 billion term loan, underscores the ongoing trend of private equity firms leveraging the loan market for dividend recapitalizations, with this marking the seventh such instance in three years for some portfolio companies. This approach allows private equity owners to capitalize on favorable market conditions and strong investor appetite for floating-rate debt.
