ING reportedly seeks buyers for $500 million in data-center loans

ING is reportedly seeking buyers for about $500 million in data-center loans, including debt linked to the Stargate project in New Mexico. The proposed auction puts a concrete transaction behind concerns about AI infrastructure financing, while leaving an important question open: is the bank distributing loans as usual, or seeking an exit?

An auction for pieces of the buildout

Bloomberg reported on November 6, citing people familiar with the matter, that ING is offering a portfolio of 12 loans. CNBC relayed the report the same day. An ING spokesperson declined to comment, leaving the proposed sale without public confirmation from the bank.

The portfolio reportedly includes a $25 million loan piece tied to Stargate in New Mexico, a project involving OpenAI, SoftBank and Oracle. Other loan assets involve Vantage Data Centers and CyrusOne. The Stargate exposure is one component of the portfolio, not the full amount ING is seeking to sell.

ING will use a bids-wanted-in-competition process, known as a BWIC, according to Bloomberg. That is a competitive auction in which investors bid for pieces of a loan portfolio. Bids of at least $10 million are due by November 19. The deadline is for offers from prospective buyers, not a reported completion date for the sale.

How a bank passes on lending exposure

Selling these loans need not mean abandoning the projects behind them. Investment banks typically use a lend-to-distribute model for this kind of financing, Hank Calenti, global markets strategist at SMBC, told CNBC. Under that approach, a bank makes loans with the intention of distributing exposure to other investors rather than retaining it all.

Potential buyers include private-credit investors, asset managers and insurers, Calenti said. Their attraction is the assets’ expected higher returns. The process gives banks a route to move data-center credit exposure to investors willing to hold it, as the financing needed for the AI buildout grows.

For a selling bank, the calculation involves more than reducing exposure. Calenti said it must weigh the cost of any discount accepted on the loans against the benefit of freeing cash for further lending. He also included the need to explain the exposure to the bank’s board among the costs of that decision.

This could be business as usual, or financiers looking to exit before the door shuts.

Hank Calenti, global markets strategist at SMBC, speaking to CNBC

Construction risk complicates the calculation

The auction arrives as investors question whether the scale of AI infrastructure spending will deliver the returns expected of it. Pruksa Iamthongthong, head of APAC equities at Aberdeen Investments, told CNBC that concerns about greater scrutiny of data-center development were adding to those existing financing questions.

Iamthongthong expects near-term volatility could continue while markets assess possible delays to U.S. data-center construction and constraints on computing capacity. Her warning concerns the pace at which infrastructure can be delivered, alongside the financial expectations supporting the spending. It is a forecast about those pressures, not evidence that the loans in ING’s portfolio have failed.