ING Auctions $500 Million in Data Center Debt as AI Risks Mount

ING is selling a portfolio of 12 data center loans valued at approximately $500 million to private investors.

The Dutch bank will conduct a bids-wanted-in-competition auction, requiring minimum bids of $10 million by November 19. The package includes a $25 million loan linked to the Stargate project in New Mexico, which involves OpenAI, SoftBank, and Oracle. Other assets in the sale involve Vantage Data Centers and CyrusOne. An ING spokesperson declined to comment on the transaction.

This move aligns with a lending-to-distribute model where investment banks transfer credit risk to other financial institutions. Hank Calenti, global markets strategist at SMBC, noted that buyers typically include private credit firms, asset managers, and insurers. These entities purchase such assets seeking higher expected returns compared to traditional holdings.

The sale occurs as concerns grow regarding the debt levels associated with artificial intelligence infrastructure. The U.S. midterm elections, which resulted in a Democratic sweep, have intensified these fears. Lawmakers in certain states may impose moratoriums or stricter regulations on data center construction. Following the election results, the Nasdaq Composite Index fell 5.5% on Thursday, marking its worst day since April 2025 and pushing the index into correction territory.

Calenti told CNBC that the decision to sell depends on the balance between the discount received and the benefit of freeing up cash for further lending. He added that the cost of holding the exposure includes explaining it to the bank's board. "This could be business as usual, or financiers looking to exit before the door shuts," he said. Pruksa Iamthongthong, head of APAC equities at Aberdeen Investments, said the political shift has increased scrutiny on data center development. She expects near-term volatility to continue as the market assesses potential delays in U.S. construction and constraints around compute capacity.

Other major lenders have taken similar steps. JPMorgan Chase and Morgan Stanley explored ways to reduce their data center lending exposures earlier this year. A May 3 report by the Financial Times indicated these strategies include private sales to non-bank lenders and significant risk transfers. These mechanisms allow banks to move part of their credit risk to investors, thereby freeing up balance sheet capacity.