Project bond
A bond issued by a ring-fenced project company and repaid from project revenues, here usually data centre leases.
How it works
A project bond is issued by a ring-fenced project company and repaid from the project's revenues. Investors rely on the project's contracts and assets rather than on the sponsor's balance sheet.
In GPU and data centre deals
In AI infrastructure, project bonds have financed large hyperscaler data centre campuses, backed by long leases or similar commitments and sometimes by residual value support. They can raise very large amounts at investment-grade ratings when the lease and support package is strong.
What gets negotiated
- Lease or contract terms and the tenant's credit
- Residual value or other credit support
- Construction risk and completion support
- Amortisation profile against the lease term
In the filed deals
Applied Digital, TeraWulf, Cipher, Core Scientific and Hut 8 all issued data centre project bonds in 2025-26.
For in-house counsel
Project bond 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.
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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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