STT GDC in talks for S$3.1 billion syndicated loan

Standard Chartered, UOB, OCBC and DBS are acting as global coordinators, mandated lead arrangers and bookrunners, according to people familiar with the matter. The people asked not to be identified because the discussions are private. The three-year facility pays 165 basis points over the Singapore Overnight Rate Average and carries an option to extend by up to two years. Proceeds will be used to finance STT GDC's assets, the people said.

Representatives of STT GDC, Standard Chartered, DBS, KKR and UOB declined to comment, while Singtel and OCBC did not respond to a request for comment, The Business Times reported.

Acquisition and earlier loan

The talks follow the September completion of STT GDC's acquisition by a group led by KKR & Co and Singapore Telecommunications. The group agreed to buy the company for S$6.6 billion. DBS, OCBC and UOB earlier participated in a S$5 billion sustainability-linked loan for the purchase. The proposed S$3.1 billion facility is smaller than that loan.

STT GDC operates data centres in 12 countries including India, South Korea, Japan, Malaysia, the UK, Germany and Italy, according to The Business Times, which cited its website. The Business Times described STT GDC as one of Asia's largest data centre operators. Analytics Insight reported that STT GDC plans to invest the money to support data centre growth, on the view that demand for AI will continue to rise in the next few years.

Building and running data centres requires investment in land, buildings, power systems, cooling equipment and servers, Analytics Insight reported. Many operators are turning to bank loans to cover those costs. The loan comes as technology companies have been spending heavily to meet growing AI needs, Analytics Insight reported.

AI debt backdrop

The loan adds to a wave of debt financing driven by the AI boom. More than US$650 billion of AI-related debt has come to market since the start of 2025, according to data compiled by Bloomberg. Moody's Ratings expects at least US$3 trillion of data centre-related investment over the next five years. The Business Times reported that the debt wave has pushed up bond yields and increased scrutiny of valuations for AI-linked companies.

Analytics Insight said the open question is whether AI companies will earn enough to support the investments. It said data centre operators may find it harder to repay loans if earnings fall short. Rising debt could also put pressure on their finances, Analytics Insight said.