Debt service reserve account (DSRA)
A reserve intended to cover a defined amount of debt service, held as cash or an accepted support instrument.
How it works
A debt service reserve account (DSRA) holds enough cash to cover a set period of debt payments, often six months. If operating cash falls short, the lenders can draw on the reserve to keep the debt current. A letter of credit or guarantee may stand in for cash.
In GPU and data centre deals
DSRAs are common in data centre project finance and some GPU facilities. Lenders size the reserve on the coming debt service and require it to be refilled from cash flow before any distributions. Sponsors try to use letters of credit instead of cash so equity is not tied up.
What gets negotiated
- Months of debt service covered
- Cash, letter of credit or guarantee
- Ranking of top-up payments in the waterfall
- Release when the debt is refinanced
Why the distinction matters
Check the sizing period, replenishment, permitted investments and release conditions. A reserve buys payment time; it does not remove a sustained operating deficit.
Read the structure
How a strong customer contract supports a project without guaranteeing its bonds.
Hyperscaler lease-backed project bonds ↗In the filed deals
TeraWulf's Lake Mariner indenture sets the reserve at US$447m on the issue date.
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.
- Contract libraryGPU contracts, leases, power, equity and JVs, quoted from filed contracts.
- Issues list builderBuild an issues list from the lender’s or the borrower’s side.
- 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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