Loan-to-value (LTV)

Loan-to-value (LTV) is the ratio of a loan amount to the appraised or projected value of the asset securing it, expressed as a percentage, and is a core underwriting metric in data center project financing. Lenders typically cap data center construction and green loans around 50-65% LTV given the asset class's capital intensity and tenant-concentration risk, though stabilized, fully leased hyperscale facilities with long-term contracts can sometimes secure higher leverage. A lower LTV signals more borrower equity at risk and generally corresponds to a lower interest rate; operators frequently combine senior secured debt at 50-60% LTV with mezzanine financing or partner equity to fund gigawatt-scale campuses that can cost $10 billion or more. LTV is usually assessed alongside debt-service coverage ratio and pre-leasing levels, since a facility with confirmed hyperscale tenants and long triple-net leases is easier to finance at higher leverage than a speculative, unleased build.