More Tales From Nvidia: The Clocks on One Building (Issue #233!)
The following is quite an exposition of some of the trickiest financing, ratings sleight of hand, and hidden leverage and exposure I have ever seen. You must read it. It is, in my mind, undecipherable…unforecastable although I do think that technological obsolescence is a clearly present and un-sizable risk – to both the debt holders and META ($META) as guarantor of residual value.
If it were me, I would require that guarantee on the books as equivalent to debt that could be amortized in the same manner the debt held externally will be amortized. Instead, I believe slight of hand and inadequate accounting rules have kept massive debt off Meta’s books until and if the residual guarantee clauses need to be exercised. One wonders what a 10-year-old data center with 10-year-out of date chips in its servers will be worth in 10 years or said differently, how big the actualized value guarantee has become.
This is the biggest three card Monte game ever played!!
PS- does your pension plan own this “debt”?
The institutional calendars inside Meta’s repeated AI-infrastructure financing architecture
Shanaka Anslem Perera. 8th August 2026
On 28 July 2026, Meta repeated the structure.
An external capital partner would own 80 percent of a new data-centre venture. Meta would retain 20 percent, manage construction and occupy the entire campus. The leases would begin with four-year terms, followed by four extension options that could carry occupancy to twenty years. A declining residual-value guarantee would run through the first sixteen years. A residual-value guarantee works like this. If Meta leaves a property, and if the other conditions written into the contract are met, and the property is then worth less than the figure set for it, Meta pays the difference. Those conditions matter. Payment is not automatic on departure. BlackRock-managed funds would contribute equity. A $12.5 billion debt financing would help fund approximately $14 billion of development costs for a one-gigawatt campus in El Paso expected to begin coming online in 2028.
Nine months earlier, Meta had used the same essential architecture at roughly twice the development scale in Richland Parish, Louisiana.
