Odd Lots This Is What It Takes to Get a Data Center Financed
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Dec 11, 2025 
Travis Wofford, a partner at Baker Botts and an expert in data centers, walks listeners through the complex world of financing these hybrid assets. He reveals the challenges of securing funding amid rising political sensitivity and community concerns. Wofford explores how tech firms prefer third-party financing to maximize capital for higher-return projects and discusses the evolving importance of location and power interconnection. He also highlights the risks lenders face and the innovations, like GPU futures, that are reshaping the financing landscape.
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Data Centers Rhyme With Older Infrastructure
- Data center deals reuse financing structures from telecom and solar securitizations, they mostly 'rhyme' with older asset classes.
- Rating agencies and underwriting draw heavily on energy and telecom precedents to assess data center bonds.
Hyperscalers Keep Infrastructure Off Balance Sheet
- Hyperscalers prefer off-balance-sheet infrastructure because their core tech yields higher returns than owning low-margin assets.
- Outsourcing data center infrastructure preserves capital for higher-return tech investments.
Protect Securitizations With Conservative Structuring
- Use conservative loan-to-value and anticipated repayment dates to protect securitizations from tenant rollover risk.
- Target lower advance rates and structure rated final maturities to ensure principal repayment before tenant releases.