Asset-backed securities (ABS)
Notes issued by a bankruptcy-remote vehicle and repaid from the cash flow of a pool of assets rather than from the sponsor's general credit. In digital infrastructure, ABS is backed by data centre leases or, increasingly, GPU capacity contracts.
How it works
Asset-backed securities are notes issued by a bankruptcy-remote vehicle and repaid from the cash flows of a pool of assets, rather than from the general credit of the company that created the assets. The notes are usually rated and split into classes with different priorities.
In GPU and data centre deals
Data centre ABS is backed by leases and the buildings they relate to, held in a master trust or similar structure. GPU ABS, backed by GPU capacity contracts and the hardware, is newer. In July 2026 SEC staff indicated that qualifying data centre securitisations need not be treated as asset-backed securities under the Exchange Act, which may change how some US deals are documented. European deals follow the EU and UK securitisation regulations.
What gets negotiated
- Asset pool, eligibility and concentration limits
- Class structure and ratings
- Anticipated repayment date and rapid amortisation triggers
- Back-up manager and true sale analysis
In the filed deals
Vantage Data Centers' GBP600m Cardiff deal in May 2024 was the first EMEA data centre ABS.
For in-house counsel
Asset-backed securities in the filed documents
Where the term turns up in filed contracts and what is market, for the lender’s or the borrower’s side. Previews are open; the full text is free with InfraCompute Weekly.
- What’s market: Cash trap level in data centre ABSWhere is the cash trap set in data centre securitisations?
- What’s market: Rapid amortisation trigger in data centre ABSAt what DSCR does a data centre securitisation switch to rapid amortisation?
- Clause library: Cash trap in data centre ABSIn a data centre securitisation the issuer keeps excess cash flow while the debt service coverage ratio stays above a set level.…
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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