KBRA Assigns Preliminary Ratings to Flexential Issuer, LLC and Flexential Co-Issuer, LLC, Series 2026-1/2

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to four classes of notes from Flexential Issuer, LLC and Flexential Co-Issuer, LLC (together, the Co-Issuers), Series 2026-1 and Series 2026-2 (Series 2026-1/2).

The Notes are secured by 28 data centers generating approximately $663.3 million of Annualized Revenue and $353.2 million of Annualized Adjusted Net Operating Income (AANOI) as of the Statistical Disclosure Date (October 31, 2025). “Annualized Revenue” means the total revenue expected from a customer contract over a 12-month period as of the determination date. For active contracts, it includes current Annualized Monthly Recurring Revenue (AMRR) plus additional revenue earned over the past year. All customer contracts that relate to the data centers generated approximately $631.9 million of Annualized Revenue as of the Statistical Disclosure Date. Site level revenue includes incremental revenues in excess of the annualized rental revenue from tenant contracts. “AANOI” means Annualized Revenue, adjusted for applicable pass through amounts and permitted equity contributions, less operating expenses and a management fee, over the preceding twelve months.

The underlying real property interests consist of 19 leasehold interests (58.1% of AANOI) located in 11 markets and nine fee simple ownership interests in multi customer enterprise data centers (41.9% of AANOI) located in 6 markets. One of the leasehold interests is for 99 years and given the duration of the leasehold interest, KBRA gives residual value credit for this asset and for the remainder of this report will be included in the statistics for the owned assets. The data centers are comprised of approximately 1.8 million square feet (sf) of data center space and can provide approximately 199 megawatts (MW) of critical load power to customers.

The data center colocation customers utilize its data centers space for reliable information technology infrastructure and services, including data center space, power and cooling, connectivity, on-demand computing services, managed services, and professional information technology consulting services. As of the Statistical Disclosure Date, the portfolio is comprised of 2,152 unique customers, pursuant to separate customer contracts with a weighted average remaining contract term of 2.4 years. The largest customer accounts for 8.8% of Annualized Revenue while the top 20 customers account for approximately 34.6% of Annualized Revenue. The portfolio of customers operate in 149 unique industries. The top three industries include software (13.6% of Annualized Revenue), business services (11.4%), and networking software (11.3%).

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Methodologies

• Structured Finance: Global Structured Finance Counterparty Methodology
• ABS: Data Center ABS Global Rating Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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