Variable funding note (VFN)
A note that allows drawings and repayments within contractual limits rather than one fully funded issuance.
How it works
A variable funding note (VFN) is a securitisation note that can be drawn and repaid within a limit, like a revolving credit facility, rather than being fully funded at issue. Banks usually hold VFNs.
In GPU and data centre deals
Data centre ABS master trusts use VFNs to fund new buildings or acquisitions before a term issuance. The VFN is later refinanced by a rated term series. It gives the sponsor flexible funding inside the same structure and security package.
What gets negotiated
- Commitment size and availability period
- Ranking against term notes
- Conditions for each draw
- Pricing on drawn and undrawn amounts
Why the distinction matters
Check availability, eligibility and liquidity conditions separately from term notes. A maximum VFN commitment cannot be counted as drawn debt.
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
Aligned 2026-1 includes a US$250m Class A-1-V VFN; Vantage Cardiff's VFN pays SONIA + 2.75%.
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.
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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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