Step-in rights
Contractual rights allowing a beneficiary or its nominee to intervene in a project or contract when specified conditions occur.
How it works
Step-in rights let a lender, or its nominee, take over a borrower's role under a key contract when the borrower defaults, so the contract continues instead of being terminated. They are usually granted by the counterparty in a direct agreement.
In GPU and data centre deals
In GPU and data centre finance, step-in rights matter because the collateral only has value if the customer contract or lease keeps running. If a neocloud fails, lenders want time to appoint a replacement operator and keep the customer paying. The practical value depends on the notice and cure periods, and on whether a capable replacement operator exists.
What gets negotiated
- Notice the counterparty must give the lenders before terminating
- Cure periods and how long lenders have to step in
- Conditions for transferring the contract to a replacement operator
- Liability of the lenders while they have stepped in
Why the distinction matters
Check notice, cure, consent and operational requirements. Equipment security alone does not give access to a facility or the right to operate customer workloads.
Read the structure
How GPU collateral and customer cash flows support lending, and where the two can diverge.
GPU-backed loans: contracts, equipment and repayment ↗In the filed deals
IREN's statement of work gives Microsoft the option, on the supplier's insolvency, to continue meeting its financing or colocation payment obligations.
For in-house counsel
Step-in rights 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.
- Clause library: Data centre access and step-in lettersGPUs sit in someone else's building. Lenders need the right to enter, remove or keep running the equipment. CoreWeave DDTL 5.5…
- 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.
- 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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