U.S. data center operator TeraWulf Inc. (WULF.US) is arranging approximately $3.5 billion in debt financing to fund the construction of its campus in Kentucky.
The plan involves the company's first-ever entry into the leveraged loan market, alongside an issuance of high-yield bonds, to support its expansion in artificial intelligence (AI) infrastructure.
According to the company's CFO, Patrick Fleury, the financing initiative is expected to launch this year, with Morgan Stanley likely to serve as the lead arranger.
It is worth noting that TeraWulf was previously the first bitcoin mining company to access the high-yield bond market, having issued $3.2 billion and $1.3 billion in such bonds last October and December, respectively.
In recent years, TeraWulf has been gradually shifting its focus away from bitcoin mining toward AI infrastructure development.
This past Monday, the company announced a 20-year data center lease agreement with AI startup Anthropic for its Justified Data Center campus in Hawesville, Kentucky.
Fleury projected that this agreement could generate around $19 billion in revenue for the company and includes options for two five-year renewal periods.
Additionally, as previously reported, Anthropic has also agreed to lease AI computing chip capacity at two other TeraWulf data centers, further expanding their collaboration.
Fleury stated that Morgan Stanley, having previously managed the company's bond financings on multiple occasions, is currently exploring the feasibility of its entry into the leveraged loan market.
Several lenders that participated in TeraWulf's $250 million revolving credit facility earlier this year are also expected to be involved in the financing for this Justified Data project.
As global investment in AI infrastructure continues to surge, related financing volumes are rising rapidly.
Data compiled by Bloomberg shows that, so far this year, global AI-related debt financing, including companies like Amazon and SpaceX, has reached approximately $335 billion, more than doubling compared to the same period in the previous year.
Concurrently, beyond traditional bond financing, an increasing number of AI infrastructure companies are turning to the U.S. leveraged loan market for funding.
For example, a subsidiary of Blackstone-backed data center operator QTS is currently marketing a $1 billion leveraged loan to refinance data center-related debt and pay dividends.
In May of this year, AI cloud computing firm CoreWeave also successfully issued a $3.1 billion leveraged loan with an interest rate 4.5 percentage points above the benchmark rate.
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