Microsoft-linked Project Odyssey bond sale may grow to $3.9 billion
Demand topped $8 billion as the QTS data center financing offered yields comparable to single-B junk bonds
A Microsoft-linked data center bond sale known as Project Odyssey may increase to $3.9 billion after investor orders exceeded $8 billion, Bloomberg reported.
Subsidiaries of Blackstone-backed QTS Realty Trust are selling the bonds to finance a data center venture in Georgia, according to people familiar with the matter. Strong demand could allow the issuer to expand the transaction by about $1 billion.
The five-year bonds are being marketed with a coupon in the high-6% range and at a discount that would lift the yield into the low-to-mid 7% range, the people said. Although the debt is expected to receive investment-grade ratings, its yield is comparable to single-B junk bonds.
The sale could reach the market as soon as Tuesday, though discussions remain fluid. Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley held investor calls about the transaction last week.
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The bonds are expected to be issued by two special-purpose subsidiaries of QualityTech, a QTS unit. Microsoft and the banks declined to comment, while QTS did not immediately respond to Bloomberg.
QTS has raised billions through public and private investment-grade bonds and asset-backed securities. QualityTech subsidiaries sold $4.6 billion of high-grade debt in April to fund Microsoft computing capacity, attracting about $12.5 billion of peak demand.