SEC exempts data-center bonds from key securitization rules

The SEC just handed data center operators a regulatory gift. On July 29, the agency’s Division of Corporation Finance issued interpretive guidance clarifying that certain data center securitizations don’t qualify as “asset-backed securities” under Section 3(a)(79) of the Securities Exchange Act of 1934. Translation: a whole category of data center debt just got easier and cheaper to issue. Data center ABS and commercial mortgage-backed securities issuance blew past $25 billion in 2025, eclipsing the combined total of the prior three years. With AI infrastructure spending showing no signs of slowing down, Wall Street needed a cleaner pipeline for this kind of capital. Now it has one. What the guidance actually changes The SEC’s clarification applies specifically to securitizations where the issuing entity directly owns the data center and the securities get repaid from net operating income. Think of it like a building owner borrowing against their rental income, rather than a bank bundling up loans and selling them off. Operators have been doing these deals since at least 2018. Companies like Sabey, Compass, CyrusOne, and STACK Infrastructure have all tapped securitization markets. ...