On the one hand, these debts may be off the balance sheet, but institutional investors certainly know about them and can reason about the company's valuation. Retail investors may be caught out slightly more.

But on the other hand, these companies are essentially paying for the service of taking the debt off books (by paying the leasing premium to the SPV partners). I guess I'm wondering what they really gain from doing so, if again sophisticated investors can see through the games?

It's mostly for having lower debt-to-equity and higher equity multiplier (better stock price). And you retain your credit rating and can get cheaper debt.

But of course it is obvious in this scale. However, credit ratings do not care, as they are driven by regulation, and regulators get their paycheck regardless.

Also in the joint venture like Blueowl/Meta for the $27B Hyperion data center in the case when things go wrong Meta is in theory bankrupt remote. So in theory it should not affect credit rating because when the bad debt is not served, Blueowl, not Meta, is in the hook for it. And Meta's investors should be protected for this event.

I think it's just a common practice to do it this way in the industry. May not mean these companies are intentionally hiding something at this point of time.

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