CSC26 BV - Backstop Agreements: A New Hybrid Instrument in Data Center Finance

Session Description

Over the past year, we have seen an emergence of a new type of financial instrument: backstop agreements. These instruments are tied to the unprecedented data center buildout driven by the AI boom and function as a form of guarantee for data center lease obligations, in which the guarantor has the ability to assume the lease in the event of default. These agreements embed elements of optionality and represent a hybrid instrument spanning credit risk, option pricing, and real estate lease economics. This presentation will provide an overview of the data center ecosystem and its key market participants, highlight typical terms observed in backstop agreements, and discuss valuation methodologies in an emerging area where established guidance is limited.

Speakers

Marina Kagan| Partner | PwC

Continuing Education

Review of this session recording will award 1.2 CE hour(s). 

CPE credit is not awarded for this pre-recorded offering.