TNB Tech Minute: Amazon Invests Billions in Australian Data Centers - Tech News Briefing
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Victoria Craig : Here's your TNB Tech Minute for Monday, June 16th. I'm Victoria Craig for the Wall Street Journal. Amazon said it will allocate $13 billion to expand its data center infrastructure in Australia as it looks to meet the boom in global demand for AI computing. The tech titan said the investment, which is the biggest publicly-announced investment from a global tech provider, will strengthen the nation's cloud computing and AI capabilities. To support the expansion, amazon said it's also investing in three new solar farms. Elsewhere, Southwest Airlines is adding a new cockpit alert system to help pilots avoid dangerous situations. The system designed by Honeywell delivers verbal warnings and text alarms if a pilot is about to use the wrong runway or takeoff from or land on a taxiway. Those alerts are similar to car warning systems that detect other cars in blind spots or alert a driver if they're about to back into another car. The new system comes after carriers navigated close calls at US airports in recent years. And finally, crypto billionaire, Justin Sun will take his Tron Group public through a reverse merger with a small Nasdaq-listed toy company. SRM Entertainment will be renamed Tron and Sun has been named an advisor to the company. Today's announcement comes after Sun attended a dinner last month with President Trump, a gala thrown for the biggest shareholders of his meme coin. A few months ago, as part of a broader rollback of crypto enforcement under the Trump administration, the SEC asked the court to pause a fraud lawsuit against Sun and three of his companies. He faced charges that accused him of manipulating the market for Tron's TRX Token. Sun has called the lawsuit meritless. For a deeper dive into what's happening in tech, check out Tuesday's Tech News Briefing podcast.
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The four Vantage facilities in the German deal are fully leased to three hyper-scale companies, all rated AA- or higher, with the largest holding a coveted AAA rating, according to a note from Scope Ratings. The two recent European deals also borrow ideas from their previous U.S. transactions. For instance, the "soft bullet" style, whereby bonds are repaid within five years even though they mature decades later, is a feature of deals on both sides of the Atlantic. That meant that Vantage was able to attract its traditional U.S. investor base to its European issue. Vantage said the latest transaction also helped it broaden its European investor base. "We saw a lot more European dedicated insurance capital, fund managers, ABS buyers, come into this deal," Cosgray said. "The liquidity that we're expanding in this market is real securitization depth for European investors." The structure of the German deal also evolved from the U.K. deal by offering investors two tranches of debt: a senior Class A note rated A- and a smaller, subordinated Class B note rated BBB-. Both notes are considered investment grade by Scope. "I don't think investors view the credit risk for the B notes relative to A notes as significant but they're getting a better coupon," said Metwalli, Vantage's CFO. He highlighted that investors received a 65-basis-point pickup in yield for what could be perceived as only a marginal increase in risk with the Class B notes, which were four times oversubscribed. Vantage's foray into European ABS comes at a challenging time for the market. Data compiled by JPMorgan points to 57 billion euros of issuance so far in 2025, on track for a steep decline from the 140 billion euros raised in 2024. Analysts point to macroeconomic uncertainty as being largely responsible for the lack of deal-making. Growth The deals are designed keeping Vantage's global expansion in mind. The company also operates in major data center hubs in Dublin, Milan, Warsaw, Johannesburg and Zurich. Its footprint also spans the Asia-Pacific region, with facilities in Malaysia, Australia, Japan, Hong Kong and Taiwan. Vantage is now "very eager" to bring the same securitization model to its other markets, Cosgray added. He suggested the company is more likely to issue debt in local currency in those regions and will begin the process by the end of next year. Julian Craughan, a partner at Hogan Lovells, who advised Barclays, suggested there was scope for greater flexibility in future deals as other data-center operators enter the securitized debt market in Europe. "Investors have got one deal under their belt in continental Europe," said Craughan. "There is scope for further innovation in the future, for example we may be able to build these [ABS deals] out to include data centers in multiple jurisdictions as collateral as we see in the US market."
