Leanna Baker

That's the idea that's gained traction late last week and over the weekend, that it looks like these two private companies, SpaceX and XAI, which also owns X, would come together.

A lot of this is futuristic.

If investors in SpaceX want to see these data centers in space one day, which there's been some filings that could indicate maybe that's something they're working on, this is a way to bring that together.

But it's hard to say.

It's not like a public shareholder deal or, you know, there might be committees, but a lot of it's done behind the scenes.

So the best way to think about this is they are tapping all debt markets.

So we have obviously the typical unbalanced sheet corporate borrowing, which you see like with the Oracle deal today, that can be an investment grade bond, a high yield bond or a leveraged loan or even a private credit direct loan.

But there's

a lot of off-balance sheet borrowing happening as well.

I know that sounds a little bit scary when you first hear the words off-balance sheet, but what it simply means is that instead of an investor lending to the company, they're lending to the actual data center project itself.

So they create a special purpose vehicle that is the actual builder and owner and borrower to create the data center.

When you tap that, that opens up a whole other realm of markets.

So, for example, the bank project finance construction loan market has been heavily involved in this space.

You're seeing private placements, which are typically insurance companies.

You're seeing structured finance investors in the form of commercial mortgage-backed securities and asset-backed securities.

You're seeing private credit.

You're seeing GPU finance for the chips.

It is touching all parts of the debt markets.

What are they having to pay for all of this, Paula?

It really depends and it can range from just a little bit over investment grade all the way to double digit teens, mid-teens yields.