Interest in Artificial Intelligence (AI) and its impact on society is at an all-time high. As AI technology advances and the digital economy continues to expand, additional data centers are being constructed to boost the world’s computing capacity.
In this Insights, the first of a series on data centers, CRA’s Tiago Duarte-Silva, Ana Balcárcel, and Keith Czerney discuss the surge in data center investments and the increasing prevalence of securitization as a source of data center finance.
Although traditional funding sources such as bank loans, private debt, equity offerings, and cash reserves remain viable options, developers are turning to alternative financing strategies with greater frequency. Securitization transactions, including asset-backed securities (ABS), have become an attractive financing tool because they offer advantages like reduced refinancing risk, lower borrowing costs, and enhanced financial flexibility.
In the next installment of this series, the authors examine the evaluation of ABS creditworthiness and provide a thorough analysis of risk-return considerations from an investor’s perspective.
Read the full overview of data center financing and asset-backed securities here.
