Key facts
- Billions are being invested in data center development through 144A bonds, a private credit instrument.
- The 144A structure offers speed, scale, and access to a broad institutional investor base.
- Meta partnered with Blue Owl Capital and Pimco on a $27.3 billion 144A bond offering for a Louisiana data center campus.
- Developers have collectively added over $40 billion in 144A placements since November.
- Despite AI-related risk concerns, data centers are increasingly viewed as infrastructure with predictable cash flows due to preleasing.
Billions of dollars are being channeled into data center development through a specialized segment of private credit, primarily utilizing 144A bonds. These unregistered debt securities, sold to institutional buyers, offer speed and scale, making them attractive for financing large-scale projects.
The 144A market for data centers, virtually nonexistent a year ago, has rapidly expanded. Chris Lozinak, managing director at Newmark, noted that the structure provides flexibility, allowing for longer loan terms that help projects stabilize before construction debt matures.
Meta notably utilized this framework in 2025, partnering with Blue Owl Capital and Pimco on a $27.3 billion bond offering to fund a 2-gigawatt data center campus in Louisiana. Funds associated with Blue Owl took an 80% stake in the project. The debt, maturing in 2049, received an investment-grade rating from S&P Global, partly due to construction risks being transferred to Meta.
Beyond this large deal, developers such as Applied Digital, CoreWeave, Hut 8, and Related Cos. have collectively secured over $40 billion in 144A placements since November. Despite some investor concerns about the concentration of risk in AI-related projects, the financing is supporting preleased data centers, which are viewed as real assets with bankable cash flows.
Analysts like John Medina from Moody's Ratings see these data center projects, backed by credit-rated tenants and long-term leases, as akin to triple-net investments rather than speculative assets, aligning with infrastructure financing norms. Recent ratings from Moody's for DataBank Holdings and Compass Datacenters reflect this positive outlook, with Compass Datacenters achieving a AAA rating for its hyperscale securitization.