alt Hacker NewsIs Meta actually obligated to repay the loans or not?
That’s how you can decide if this is disingenuous or not. If Meta is obligated to repay the loan and used to synthetic means to get it off the balance sheet that’s a problem.
If they have in fact successfully transferred risk to other parties then that’s what deals like this are for. It’s the whole reason the concept of limited liability exists.
I am fully willing to believe it’s the former. But that’s the test.
Replies
>Is Meta actually obligated to repay the loans or not?
They aren't, but they're obligated to pay leases for it (they can't just build the datacenter and then walk away), which is kind of like having to repay the "loans".
Even if they aren't obligated to repay, they have to in practice because it'll impact their ability to get loans in the future. If the shell company declares bankruptcy and gets the loans off Meta's books no one will ever loan money to Meta again.
I don't think Meta has a debt relationship with the loans involved here; that's the point. It does have strong contractual obligations to the wrapper business, though.