Applied Digital Secures $300 Million Bridge Loan
Applied Digital, a company specializing in Bitcoin mining hosting and cloud services, has secured a substantial $300 million senior secured bridge loan, orchestrated by Goldman Sachs. This financing is earmarked for the swift advancement of its latest initiative, a 150 MW AI data center project, located at the Polaris Forge 1 campus. This move aligns with the company’s earlier plans disclosed in April, during which it inked a substantial 15-year lease valued at $7.5 billion with an unidentified U.S. investment-grade hyperscaler.
Construction and Financing Details
The bridge loan will facilitate ongoing construction efforts for the so-called “Building 3” at the campus, which is part of Applied Digital’s larger AI Factory initiative. In addition to this, the company operates another facility, Delta Forge 1, with a capacity of 430 MW. Notably, the loan is secured against project assets and offers flexibility as it allows for prepayment without penalties. This gives Applied Digital the option to refinance into longer-term financing arrangements once permanent funds become available.
According to management, there are plans to accompany this bridge loan with an additional $300 million senior secured revolving credit facility. This would elevate the overall financing arrangements to approximately $600 million, aimed at supporting various developmental expenses tied to pre- and post-lease activities in the realm of AI and high-performance computing.
Company Background and Future Plans
First making its mark as a builder of data centers primarily serving Bitcoin and cryptocurrency miners, Applied Digital operates facilities in Jamestown and Ellendale, North Dakota, which are expected to be fully operational by the end of 2025. In a separate financing venture, the company made headlines in March by securing $2.15 billion through senior secured notes issued via its APLD Compute 2 subsidiary, intended for the development of 200 megawatts of IT load at an AI data center operated under a 15-year contract with Oracle, valued at about $5 billion.
The new bridge loan solidifies Applied Digital’s financial strategy by advancing capital for the Polaris Forge 1 expansion while the company seeks to establish a financing structure that aligns with the 15-year duration of its hyperscaler leases. Recent insights have revealed that the $7.5 billion AI campus lease is projected to provide contracted revenue visibility extending through 2041, thereby facilitating the acquisition of project-financing-style debt.
Plans for the $300 million bridge loan combined with a revolving credit facility aim to mitigate development risks as the company transitions from cryptocurrency hosting operations to developing comprehensive AI infrastructure. Furthermore, earlier financing agreements, such as those with Macquarie, have helped lay the groundwork for this expanded strategy, now expanded to a larger scale with collaboration from Goldman Sachs and additional banks in a syndicate.
