Hillhouse seeks US$600 million loan to fund data centre operator DayOne investment: sources
The move highlights the massive funding financial institutions must provide for DayOne’s global expansion
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[SINGAPORE] Asset manager Hillhouse Investment is in talks with banks for a loan of about US$600 million to fund its investment in data centre operator DayOne Data Centers, according to people familiar with the matter.
The three-year loan could carry an interest margin of 500 basis points over the benchmark US Secured Overnight Financing Rate, said the people, who asked not to be identified discussing private matters. A part of the borrowing will also go towards refinancing debt raised by Hillhouse for its previous DayOne investment, they said.
The additional financing request comes after Hillhouse and Coatue Management led a Series C investment round in DayOne that closed at US$4.5 billion earlier this month. The latest funding lifted Hillhouse’s stake in the data centre operator to about 19 per cent on a non‑diluted basis, up from roughly 18 per cent after the Series A financing in 2024, the people said.
Hillhouse’s move to raise loans highlights the scale of money financial institutions are being asked to provide as DayOne pursues an aggressive global expansion amid the AI-driven data centre boom. The Singapore-based operator is already in talks with banks to increase an existing loan facility for its Malaysian operations to as much as US$7 billion.
The new loan may include a greenshoe option, a provision that would allow Hillhouse to raise additional capital beyond the loan’s original size, according to the people. Discussions remain at an early stage and the terms of the financing could still change, the people said.
Hillhouse did not respond to a request for comment, while DayOne declined to comment.
DayOne, formerly known as GDS International, is mulling a US initial public offering targeting a valuation of as much as US$20 billion. The company’s previous rounds of fundraising had drawn investors including SoftBank Vision Fund, Citadel Securities founder Ken Griffin, and Baupost Group.
DayOne may continue to consider additional equity and debt financing options in the private and public markets, subject to its funding needs, market conditions and other considerations, the company said in a statement on Jun 5.
It runs data centres in Singapore, Malaysia, Indonesia, Thailand, Hong Kong, Tokyo and Finland, its website shows. BLOOMBERG
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