Bank of England asks about UK data center loans without tenants

The Bank of England has asked market participants for details of loans to UK data center projects with no signed tenants, Data Center Dynamics reported, citing Bloomberg.

The Bank has spent the past year examining how data center financings interlock. The outreach is not a signal that the central bank objects to speculative lending, the report said. It is trying to establish how much risk sits in a sector where project costs have climbed as facilities have grown larger. The Bank has not said what action, if any, it will take.

For allocators, the scrutiny lands on the merchant end of digital infrastructure, where a data center without a signed tenant already carries leasing risk in the equity. Supervisory attention on the debt alongside it could push lenders to require more pre-leasing, more disclosure or better pricing before committing.

The Financial Policy Committee warned last month that AI-linked investment carries "increasing leverage, opacity and, at times, circular arrangements," which could complicate risk assessment and "could amplify losses if expectations disappointed." The Bank for International Settlements has separately warned that weak disclosure of deal terms means the same data center asset may be pledged more than once.

The questions continue a run of supervisory attention on bank lending into private markets. As Private Wealth Daily previously reported, the Bank of England reviewed how Barclays booked risk on loans to private credit firms in October.