Who Bears AI Infrastructure Credit Risk? Lease Backstops and Bondholder Exit in Data Center Project Finance

Abstract

Credit support protects AI infrastructure creditors through the rules that convert project receipts into principal repayment. We compare the filed debt contracts of Barber Lake and River Bend, two data center projects with Fluidstack leases and disclosed Google support. Barber Lake directs qualifying termination receipts to mandatory redemption. River Bend combines a replacement-lease window with an elective repurchase offer whose proper completion cures the specified termination defaults. For a common cash budget and settlement price, elective repurchase retires no more principal than mandatory redemption. Remaining debt separates into face not validly tendered and valid tenders left unpurchased because of the cash constraint. With full participation and insufficient purchase capacity, creditors can remain exposed after submitting all their claims for exit and completion of the contractual remedy. A valuation model shows how the election right competes with payment delay and rationing. The analysis provides an operational framework for tracing support through payment capacity, principal exit and continuing creditor rights. A performing backstop and a completed remedy can leave substantial project exposure with bondholders.

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