Cipher Digital Inc. is preparing to raise $810 million via a high-yield bond sale to help finish construction of its Stingray Facility, a computing data center in West Texas that Amazon.com Inc. will lease under a 15-year contract, according to a person with direct knowledge of the transaction.
The proceeds from the proposed issuance are intended to cover the remaining construction expenses associated with the Stingray site, which will be leased to Amazon for the long term. The structure of the arrangement reflects a broader dynamic in which speculative, or junk, debt markets are being tapped to finance infrastructure supporting artificial intelligence and cloud computing for large technology firms.
Long-term leases inked by major tech companies such as Amazon and Alphabet Inc. have enabled smaller developers to secure substantial financing for new data center projects. In Cipher Digital's case, its prior access to debt markets demonstrates this pattern: in February, the company returned to the market and raised $2 billion for its Black Pearl data center in Texas, a deal that attracted more than $13 billion in orders.
The new $810 million offering is being managed by a group of banks and securities firms that includes Morgan Stanley, Goldman Sachs Group Inc., Wells Fargo & Co., Banco Santander SA, and SMBC Nikko Securities Inc. Those firms are acting as arrangers for the transaction.
Notably, the planned bond sale coincides with Amazon marketing at least C$7 billion, or about $5 billion, in Canadian dollar bonds on the same day. The simultaneous issuance activity highlights the crowded nature of corporate debt markets when multiple large financings are underway.
Cipher Digital previously operated under the name Cipher Mining, reflecting its origins in cryptocurrency mining before pivoting to buildout of cloud and computing facilities. The company has used the debt markets to raise capital for its Texas data center projects, relying on investor demand for assets backed by long-term leases to major technology tenants.
Context note: Information in this article is based on a report from a person with direct knowledge of the offering and on public details about past transactions. The article does not add further facts beyond those reported.