AI frenzy sweeps the securitization market! Bank of America predicts that data centers will drive the securitization scale of digital infrastructure to exceed 110 billion U.S. dollars next year.

According to Bank of America Corp's forecast, the securities market supported by various digital infrastructure (including data centers) may grow by about 46% by the end of next year, reaching approximately $115 billion. According to Bank of America Corp's report, data centers currently account for 61% of the $79 billion market size of digital infrastructure securitization. Fiber infrastructure accounts for 20% while base stations account for 18%. These figures cover asset-backed securities and commercial mortgage-backed securities. Companies have been constructing large data centers to meet the demand for artificial intelligence, with banks and private lending institutions also providing guarantees for such transactions. Meta (META.US) has chosen The Pacific Investment Management Company and Blue Eagle Capital to lead a $29 billion transaction for the expansion of its data center project in rural areas of Louisiana. Meanwhile, JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group, Inc. Sponsored ADR are leading a loan of over $22 billion to support Vantage's data center development plan, as reported by Bloomberg last week. Bank of America strategists, including Chris Flanagan, wrote in a report on August 22 that concerns about the development of data centers, the application of cloud technology, and investment paths in artificial intelligence have eased recently following strong performance announcements from some large mega-cap corporations. Especially, Microsoft Corporation (MSFT.US), Alphabet Inc. Class C (GOOGL.US), Amazon.com, Inc. (AMZN.US), and Meta, the four major data center developers, have all reported higher cloud business revenue and reiterated plans to increase capital expenditures, noted Bank of America Merrill Lynch. Over the past two years, risk premiums for all three types of digital infrastructure asset-backed securities (including data centers, fiber optics, and base stations) have significantly increased. Although Bank of America Corp's strategists expect these premiums to not further expand in the future, they believe that such securitized products offer relatively higher value compared to other types of asset-backed securities. Additionally, Bank of America Corp's strategists pointed out in a report on August 22 that the spread narrowing of container ABS will be limited as market participants assess the recent economic data, tariff policies, and the impacts of monetary policy on the market. Container shipping volume has been maintained at levels close to historical highs over the past few quarters. Bank of America Corp expects new issuances of container asset-backed securities to be around $1.5 billion this year. As the summer comes to an end, the initial issuance volume of asset-backed securities in the United States in 2025 is expected to decrease by about 0.9% compared to the same period last year, reaching $239.7 billion. Pricing this week is expected to be relatively stable.