Data center builders need cash—Frontier's CFO has a solution

Frontier Communications CFO Scott Beasley knows a thing or two about finance. After all, he’s spent the past four years guiding the operator from bankruptcy to not only profitability but a $20 billion acquisition by telecommunications giant Verizon. As the data center industry rolls full steam ahead into a high-cost building boom, he’s got some words of wisdom: look into asset-backed securities. Unlike other funding vehicles, ABS use income-generating assets as collateral. ABS vehicles have historically been used by tower companies to raise money for new projects. But in 2023 Frontier became the first in the fiber-to-the-home space to pursue ABS with a $2.1 billion financing deal to fuel its fiber expansion. It subsequently struck several more ABS deals. Some businesses in the data center arena have already seen the light. Lambda, for instance, put its existing slate of GPUs up as collateral in an ABS deal that allowed it to secure $500 million in funding for its niche-cloud expansion. But there’s room for many more such deals.