Datacenters: SEC Relaxes ABS Securitization Rules on offerings by DCs
Whatever could go wrong? Everyone is honest on Wall Street. Noticing is Antiseptic.
ABS: Asset Backed Securities.
The Securities and Exchange Commission has made it easier for data center owners to sell asset-backed securities, potentially opening the door for more debt sales as tech firms scour Wall Street for ways to pay for artificial intelligence.
The SEC said a major subset of data-center securitizations don’t need to have disclosures and investor protections that similar deals require. That includes risk retention, a requirement that companies issuing asset-backed securities retain some of the debt to better align their interests with investors.
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Latham & Watkins had inquired, or suggested, that a change in viewpoint by the SEC was needed regarding Datacenters’ financing mechanics, Bloomberg:
[SEC] staff wrote that data centers aren’t financial assets that liquidate over time, like loans or leases, and therefore bonds tied to them aren’t subject to the same rules as debt backed by car loans or home mortgages. The letter was written in response to a query from Latham & Watkins, a law firm that advocated for clarification of the rules. [My highlights.]
SEC take zero ownership of their ruling here. Its just a informal pass to not provide the same methods tied to ABS for Datacenters as defined in the Securities Exchange Act of 1934 (Sect 3(a)(79).
$3 Trillion in February 2026
