The AI boom has reached the securitization market! Bank of America predicts that data centers will push the scale of digital infrastructure securitization to exceed 110 billion US dollars next year

The Zhitong Finance App learned that according to Bank of America's forecast, the securities market supported by various types of digital infrastructure (including data centers) may grow by about 46% by the end of next year, reaching a scale of about 115 billion US dollars. According to the Bank of America report, data centers currently account for 61% of the $79 billion digital infrastructure securitization market. Fiber infrastructure accounts for 20%, while base stations account for 18%. This data covers asset-backed securities and commercial mortgage-backed securities.

Companies have been building large-scale data centers to meet the demand for artificial intelligence, and banks and private lenders are also vying to guarantee such transactions. Meta (META.US) selected Pacific Investment Management and Blue Eagle Capital to lead a $29 billion deal for its data center expansion project in rural Louisiana. Meanwhile, J.P. Morgan Chase and Mitsubishi UFJ Financial Group are leading a loan of more than $22 billion to support Vantage's plans to build a large-scale data center campus, as reported by Bloomberg last week.

Bank of America strategists, including Chris Flanagan, wrote in an August 22 report that investors' concerns about data center development, cloud technology applications, and investment paths in the field of artificial intelligence have recently abated after some large and very large companies announced strong results. In particular, four large data center developers, Microsoft (MAFT.US), Google (GOOGL.US), Amazon (AMZN.US), and Meta, all announced higher cloud business revenue and reaffirmed plans to increase capital expenditure, Bank of America Merrill Lynch pointed out.

The risk premiums for all three types of digital infrastructure asset-backed securities (including data centers, fiber, and base stations) have risen sharply over the past two years. Although Bank of America strategists do not expect this premium to expand further in the future, they believe that this type of securitization product has a high relative value compared to other types of asset-backed securities.

Furthermore, Bank of America strategists pointed out in an August 22 report that as market participants are evaluating the impact of recent economic data, tariff policies, and monetary policy on the market, the narrowing of interest rate spreads on container ABS will be limited. Over the past few quarters, container traffic has remained close to historic highs. Bank of America expects the new issuance of container asset-backed securities this year to be around $1.5 billion.

As summer comes to an end, the initial issuance of US asset-backed securities in 2025 fell by about 0.9% compared to the same period last year, to $239.7 billion. Pricing is likely to be more stable this week.