Goldman Pauses $1.3B CyrusOne Bond Sale Amid CME Outage Fallout

Goldman Sachs Group Inc. has paused a planned $1.3 billion mortgage-bond sale for CyrusOne, a data-center operator linked to CME Group Inc., after a significant outage disrupted operations at one of the world's largest derivatives exchanges. The outage, which lasted over 10 hours, occurred at a CyrusOne facility in Aurora, Illinois, a hub for trillions of dollars of daily derivatives trading. The refinancing deal, meant to be CyrusOne's largest-ever commercial mortgage bond offering, is now on hold, with potential pricing pushed to the first quarter of the next year.

CyrusOne's Aurora facility, which serves as a key hub for CME, experienced a critical cooling system failure, causing temperatures to soar above 100F. The incident has raised concerns among investors about the reliability of data-center infrastructure, particularly in light of the surging demand for AI-driven operations. CME, which accounts for about 14% of the underwritten rent at the campus, did not switch to a backup facility in the New York area, as its risk assessment suggested the Aurora outage would be brief.

The bond sale was initially on track to close this week, with early feedback expected on Nov. 25. However, the Aurora outage forced Goldman Sachs to put the deal on hold, raising questions about CyrusOne's ability to manage risks associated with critical infrastructure. The data center has since said it is enhancing its backup cooling capacity to prevent future outages. Meanwhile, KKR & Co. and Global Infrastructure Partners, which co-own CyrusOne, remain silent on the matter, as do representatives from Goldman Sachs, CyrusOne, and CME.

Market Reactions and Sector Implications

The data-center industry is already under scrutiny following the outage, particularly as AI and digital transformation drive surging demand for reliable infrastructure. The recent disruption serves as a stark reminder that even well-established facilities are vulnerable to technical failures, potentially impacting lease agreements and customer commitments. Investors are now reevaluating the risks tied to data-center investments, with termination clauses in lease agreements becoming a focal point of concern.

The broader data-center market is expected to grow significantly in the coming years, with the global market for uninterruptible power supplies (UPS) projected to reach $7.25 billion by 2029. This growth is driven by the need for business continuity and the expansion of edge computing, but the Aurora incident highlights the fragility of even the most advanced infrastructure. The incident also underscores the importance of redundancy planning, with CME's decision not to switch to a backup facility in the New York area raising questions about the adequacy of existing disaster-recovery protocols.

What This Means for Investors

The pause in CyrusOne's bond sale could have ripple effects on the broader commercial real estate sector, particularly as private equity firms and institutional investors increasingly rely on data-center assets for stable returns. The Aurora outage has already triggered a reevaluation of CyrusOne's creditworthiness and operational reliability, which may affect future financing options and tenant retention. Additionally, the bond's structure-a five-year offering with a $606.9 million AAA-rated tranche-was expected to set a precedent for future data-center bond offerings.

Investors are also keeping a close eye on the regulatory landscape, particularly as CME Group recently announced the approval of a new securities clearing house, CME Securities Clearing Inc. The clearing house, set to launch in Q2 2026, aims to help market participants comply with the SEC's clearing mandates for U.S. Treasury and repo transactions. While this development is unrelated to the Aurora outage, it reflects CME's broader efforts to strengthen its infrastructure and expand its offerings in response to market demands.

For now, the data-center industry remains in a state of cautious optimism, with demand for AI-related infrastructure showing no signs of slowing. However, the CyrusOne-CME incident serves as a sobering reminder of the risks inherent in any infrastructure-dependent operation-especially in a world where milliseconds and seconds can mean the difference between success and catastrophic failure.