ING is reportedly looking for buyers for a portfolio of 12 data center loans valued at approximately $500 million, as part of a trend among banks to mitigate credit risk associated with the expanding artificial intelligence sector.
This auction includes a $25 million loan linked to the Stargate project involving OpenAI, SoftBank, and Oracle, along with other loans tied to Vantage Data Centers and CyrusOne. The auction process, known as bids-wanted-in-competition (BWIC), requires bids of at least $10 million by November 19.
The sale underscores a shift in the market where banks are offloading data center loans to private credit firms, asset managers, and insurers, driven by fears of rising debt levels and potential disappointing returns amid concerns about delays in U.S. data center construction.
The recent political landscape, particularly the Democrats' gains in the midterms, has heightened scrutiny over data center development, contributing to volatility in AI-related stocks, exemplified by the Nasdaq Composite Index's 5.5% drop, marking its worst day since April 2025.
Analysts suggest that banks' decisions to sell may hinge on the balance between the costs of selling these loans and the benefits of freeing up capital for further lending, as they navigate the complexities of their exposure to the AI sector