Data center securities flash warning signs over AI debt supply

Real estate securities backing data centers are showing signs that investors are concerned over the massive amounts of financing that have built up in the AI race. Because of their structure, data center asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) should, in theory, trade at prices similar to other securitized assets such as ABS products like pooled auto loans or credit card payments. But in recent weeks these securities have become somewhat detached from the ABS market and are now trading with spreads closer to the corporate and high-yield bonds issued by AI hyperscalers like Google and Meta. The […] This article originally appeared on The Real Deal.