KBRA Releases Research – Data Centers: A Comparison of ABS and CMBS Structures

KBRA releases research examining the differences between asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) for data center transactions, providing insight into how these distinctions may influence an issuer’s choice of structure or an investor’s allocation decision.

With the increasing adoption of cloud-based solutions and artificial intelligence (AI), data centers have emerged as a critical asset class in recent years, requiring massive capital for construction, expansion, and operations (see our October 2024 report for a broader discussion of the data center industry as a whole). As a result, data center owners have been increasingly tapping into structured finance capital markets to fund their portfolios, leveraging asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) structures in both public and unpublished transactions.

Issuers have used ABS structures since 2018—and, beginning in 2021, CMBS single-borrower structures—to finance large data center assets, accounting for $48.69 billion in issuance across 88 transactions in the U.S. ABS structures have accounted for 70.8% of that issuance (75 deals, $459.7 million average deal balance), with CMBS accounting for the remaining 29.2% (13 deals, $1.09 billion average deal balance). As of May 2025, year-to-date (YTD) issuance has been roughly evenly split between ABS and CMBS structures. European data center issuance has also emerged in the past year, with one securitization backed by UK collateral in 2024 and another backed by German collateral in 2025—both transactions utilized ABS structures. ABS and CMBS deals have generally been backed by built and stabilized cash-flowing assets with little to no remaining construction or lease-up risk. Separately, issuers have also started using project finance structures, which are typically used to finance assets that are under construction.

In determining whether to pursue an ABS or a CMBS structure, property owners and sponsors, in conjunction with their bankers, face a number of considerations, including financial and operational flexibility, pricing, availability of capital, and the nature of the issuer’s ownership interest. This report explores the differences between ABS and CMBS data center transactions, which may provide insight into how these distinctions may influence an issuer’s choice of structure or an investor’s allocation decision. It provides a general overview in lieu of covering all variations of these structures, and it focuses primarily on U.S. transactions unless otherwise noted.

Click here to view the report.

Recent Publications

• Fiber ABS: Enterprise Fiber Takes Industry Beyond FTTP’s Last Mile
• Navigating the Data Center Landscape
• Data Centers: A Deeper Dive Into Colocation Transactions
• Data Centers in U.S. Securitization: A Primer
• Data Centers: Intersection With Project Finance
• Data Center MEP: More Than Meets the Eye

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1009641

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