FSD: The Sports Team Tax Shield
Episode publishedPodcast: Lumida Wealth : Non-Consensus...Lumida Wealth : Non-Consensus Invest Beyond the Ordinary
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Hey, guys. Hope everyone is doing well. We got another FSD. It is Monday around 11:00. I'm headed to the Cross River Classic. It's an annual event. It's sponsored sponsored by the Cross River FinTech Infrastructure Bank. They were the firm that bought my prior startup PureIQ, so I like to drop in, say hello, visit them, really high quality people. I look forward to that. So I'll be there. And then this evening, I'm on a flight to SF. So we're gonna do an earlier FSD than usual. So here we are. I wanna talk about this TacShield. A lot of interest around that. I think Fortune picked up on that t
Yes. Data center securitization is booming this year with over $4,000,000,000 in ABS issuance by February and recent deals like aligned data centers $1,180,000,000 just weeks ago. The SEC's late July guidance easing rules for these has sparked more activity, and forecasts point to tens of billions more by year end.
Who are the biggest issuers of these securities?
Aligned data centers and Sebi data centers lead with recent big issuances like Align's $1,180,000,000 Who are the Sebi's ongoing
are the sponsors?
The main sponsors are data center operators like Vantage Data Centers, backed by Digital Bridge and Silver Lake, Sabie Data Centers, DataBank, Aligned Data Centers, now with AIP and BlackRock's GIP, and others such as QTS, Center Square, Flexential, Switch, and TearPoint. They've issued
So Grok is saying $4,000,000,000 in data data center securitization roughly year to date and 10,000,000,000 soon. So those numbers are gonna balloon. That's gonna be a $100,000,000,000 to 300,000,000,000 to $500,000,000,000 in a whole new class of asset backed securitization, which is really interesting. That's a whole new class of securities that are being created, that haven't been created before. So Wall Street debt capital markets are playing this role of creating financing for data centers. Really interesting. Right? So the private credit guy step in first with these loans, like the Black
NVIDIA partners with Blackstone and others to create independent financing platforms, mobilizing over $500,000,000,000 in third party capital for customers' data centers, mainly through SPV debt secured by GPUs and contracts. Blackstone typically provides senior or private credit debt, like in Coreweave's facilities with investment grade and speculative tranches, while equity sits above absorbing first loss risk. And NVIDIA may optionally backstop up to 25% without taking mezzanine or direct first loss positions alongside Blackstone.
Oh, interesting. So NVIDIA is sitting alongside Blackstone. They're not taking much risk at all. What the what NVIDIA is really doing here is they've got a boatload of cash flow on their balance sheet, and they're putting that work to work lending in a senior secured position that's gonna be substantially protected from those are investment grade. K? That's what NVIDIA's doing. They're not doing anything esoteric or risky, actually. What's the return on capital NVIDIA gets from parking their excess cash at JPMorgan? Not much. Right? They can get a CD, I guess, and get a little bit more. So Nvi
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