KBRA assigned preliminary ratings to U.S. Signal's data center asset-backed securities notes.
U.S. Signal is bringing its first asset-backed securities (ABS) transaction to market, backed by a portfolio of colocation data centers that serve hundreds of enterprise customers. The Series 2026-1 and 2026-2 notes are secured by 10 owned facilities that generated approximately $111.8 million in annualized recurring revenue and $63.8 million in annualized adjusted net operating income as of July 2026.
**Highlights**
- KBRA assigns preliminary ratings to three ABS note classes issued by U.S. Signal Issuer LLC and U.S. Signal Co-Issuer LLC for Series 2026-1 and 2026-2.
- The notes are backed by 10 owned data centers totaling 427,992 square feet and 22.5 MW of critical load, generating $111.8 million in annualized recurring revenue and $63.8 million in adjusted net operating income as of July 2026.
- The portfolio serves 839 customers with a 2.1-year weighted average contract term. The largest customer accounts for 9.7% and the top 20 customers for 40.8% of annualized recurring revenue.
**Transaction structure and collateral profile**
According to Kroll Bond Rating Agency (KBRA), KBRA has assigned preliminary ratings to three classes of notes issued by U.S. Signal Issuer LLC and U.S. Signal Co-Issuer LLC under Series 2026-1 and Series 2026-2. The transaction is a colocation data center ABS in which both series share the same collateral pool.
U.S. Signal Company, LLC serves as manager for the trust and handles the day-to-day operations of the data center sites. The notes are secured by 10 owned data centers with approximately 427,992 square feet of space and roughly 22.5 megawatts of critical load power capacity available to customers.
As of the statistical disclosure date in July 2026, the collateral generates approximately $111.8 million of annualized recurring revenue and about $63.8 million of annualized adjusted net operating income. KBRA says the issuance marks the first ABS transaction from U.S. Signal Issuer LLC and U.S. Signal Co-Issuer LLC.
**Customer mix and sector exposure**
The portfolio serves colocation customers that use the facilities for cloud services, business continuity, and other professional services. As of the statistical disclosure date, the portfolio includes 839 unique customers under separate contracts, with a weighted average remaining contract term of 2.1 years, excluding renewals.
Customer concentration is moderate at the top end of the base. The largest customer accounts for 9.7% of annualized recurring revenue, and the top 20 customers represent about 40.8%. By industry, the largest exposures are IT Services at 22.9% of annualized recurring revenue, Insurance and Financial Services at 16.1%, and Hospitals/Healthcare at 11.1%.
In our earlier article on the U.S. AI data center boom, we examined how soaring financing costs, construction delays, and power constraints are putting large-scale projects under pressure. We also noted that only a minority of planned developments appear realistic, as investor sentiment softens and developers face rising build costs alongside growing grid and community pushback.
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