Cash sweep
A requirement to apply a defined portion of excess cash to debt repayment or a specified account.
How it works
A cash sweep requires a share of surplus cash to be used to repay debt early. It may apply all the time, at a fixed percentage, or only after a trigger. Sweeps reduce the debt faster than the scheduled repayment.
In GPU and data centre deals
In GPU finance, sweeps help match debt repayment to the shorter life of the hardware. A facility may sweep cash once a contract nears its end, if the GPU depreciated amount falls below the debt, or if a customer concentration limit is breached. In data centre ABS, a full sweep of excess cash usually starts if the notes are not refinanced by the anticipated repayment date.
What gets negotiated
- Percentage swept and whether it steps up
- Trigger events
- Order in the payment waterfall
- Prepayment fees on swept amounts
Why the distinction matters
Check which receipts enter the sweep and what operating costs, reserves and permitted payments come first. A sweep can differ from scheduled amortisation.
Read the structure
A practical reading of securitised data-centre cash flows, triggers and expected repayment.
Data centre ABS: follow the pool and the waterfall ↗In the filed deals
TeraWulf's Lake Mariner indenture sets the Applicable ECF Percentage at 50%.
For in-house counsel
Take it to the documents
The filed wording behind GPU and data centre financings, for either side of the table. Previews are open; the full text is free with InfraCompute Weekly.
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
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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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