Meta-BlackRock $14B El Paso data center only partially insured

The $14 billion Sopaipilla campus that Meta and BlackRock are building in El Paso is only partially insured, according to Financial Times reporting. Bondholders funding most of the project sit behind Meta's contractual guarantees rather than a full property policy.

The venture is an 80/20 split, with BlackRock-managed funds holding the majority stake and Meta keeping 20%. Meta is the sole tenant of the 960-megawatt, 4-million-square-foot campus. BlackRock contributed about $4.9 billion of cash and Meta contributed roughly $2.3 billion in land and construction-in-progress. A $12.5 billion senior secured bond issued through Sopaipilla Investor LLC carries the rest.

The main protection built into the deal is not conventional catastrophe cover but a residual value guarantee from Meta with an aggregate threshold of about $13 billion, stepping down over time, covering shortfalls within the first 16 years of the lease. Under the triple-net lease structure Meta itself bears property taxes, utilities, insurance, routine maintenance and structural replacements, meaning bondholder exposure runs through Meta's balance sheet rather than a reinsurer's.

Rating agencies have already flagged the underlying tension. "Rapid advancements in AI, semiconductor technology, and cooling systems could render infrastructure outdated before full monetization," Moody's analysts wrote on the AI data-center boom. The Sopaipilla bond drew roughly $17 billion in orders for $12.3 billion of paper, weaker than typical demand, and priced with A+/AA- ratings from S&P and Fitch. Marsh advised on the transaction. Brokers and analysts have called the moment a data-center insurance supercycle, with capacity strained by the sheer scale of new AI builds.

It joins a run of AI-infrastructure credit stories on our tracker in recent days, alongside bond traders' worry over $70 billion of shadow AI-credit backstops.