Splitting the GPUs from the building: inside Nscale's Ward County loan

In August 2026 Nscale signed two delayed-draw term loans with JPMorgan and Goldman Sachs for its US campuses: US$1.85bn for Ward County, Texas, and US$1.2bn for North Carolina. Both price at 2.375% over SOFR or the swap rate. The Ward County loan, described in Nscale's SEC filings, is a useful template because of how it treats the building.

Two companies, one security package

The project is split in two. Nscale Ward County Borrower, the GPU company, owns the GPUs and holds Nscale's statement of work with Microsoft, which has been novated to it so that the contract sits in the borrower rather than the parent. Nscale Ward County, LLC, the data centre company, owns the site and provides colocation to the GPU company in return for fees.

Only the GPU company borrows. The data centre company guarantees the loan and grants security, and the Nscale group pledges the shares of both. U.S. Bank Trust acts as collateral agent.

Why put the building in the net?

A GPU lender's collateral usually sits in someone else's building. If the borrower fails, the lender needs access to the racks, power and cooling to keep the cluster running or to remove it. In most GPU deals that access depends on a direct agreement with a third-party colocation provider, which may have its own lenders and priorities.

At Ward County the colocation provider is a sister company, and it is inside the security package. The lenders do not need a third party's cooperation to keep the GPUs powered. The trade-off is that the data centre company's value is committed to the GPU loan, which matters for any later financing of the building.

Draws, accounts and reserves

The rest of the structure follows contracted infrastructure practice:

• Draws on certification. Each draw needs Level 3 and Level 4 commissioning certificates from an independent consultant, so lenders fund GPUs that are installed and tested, not just ordered.
• Two tranches. US$630m fixed at the swap rate plus 2.375% and US$1,220m floating at SOFR plus 2.375%.
• Sizing. The lesser of 90% of GPU capex and the amount a 1.30x DSCR supports.
• Accounts. Cash moves through accounts held with a depositary bank: operating and annual expense reserves, a debt service reserve, a customer prepayment account and a GPU spares reserve.
• Trap and covenant. Cash is trapped below 1.10x DSCR and prepays the loan if the trap lasts six months. The financial covenant is 1.05x, with a cure.
• Management. An Nscale company, Nscale Operations US, runs the project under a services agreement.

The GPU spares reserve deserves a second look. It is the compute version of the maintenance reserve that aircraft lessors require from airlines: money set aside, before distributions, to keep the asset in working order.

Questions it raises

• If the building is later financed separately, how will its lenders and the GPU lenders share the site?
• Who replaces the manager if an Nscale company can no longer perform, and how quickly?
• How should the spares reserve scale as the hardware ages?
• Can the same result be reached where the colocation provider is a third party?