A financing project affiliated with Hut 8 Corp. has begun marketing secured, investment-grade bonds to fund construction of a cloud infrastructure facility in St. Francisville, Louisiana linked to Alphabet Inc.'s Google.
The offer centers on secured notes maturing in 2042. Initial price talk for the bonds was reported at approximately 2.13 percentage points above the benchmark yield, according to market commentary circulating on Monday.
Issuance size for the package is planned at a minimum of $3 billion. Proceeds are intended to finance a 245-megawatt data center. The underwriting group leading the transaction consists of Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley.
The development itself will encompass roughly 600,000 square feet. Project cash flows are expected to stem from a 15-year lease with cloud-computing startup Fluidstack Ltd., with that contract valued at about $7 billion. Google is providing a financial backstop for the arrangement, a role described as covering the lease payments and other obligations tied to the site.
Electric power for the facility will be supplied under a services agreement by a subsidiary of Entergy Corp., according to the information released about the transaction and project contracts.
This financing move positions a high-grade bond issuance behind a large-scale data center project that includes both a long-term lease arrangement with Fluidstack and a corporate backstop from Google. The banks managing the sale are placing the bonds as secured obligations due in 2042, and the initial yield guidance indicates the level at which investors are being solicited.
Details on final pricing and allocations will depend on how the market receives the paper and on subsequent steps taken by the underwriting syndicate, which comprises the three lead investment banks on the deal.
Given the structure outlined, revenue generation for the project is directly linked to the 15-year lease value and the effectiveness of the financial backstop that Google provides, while operational delivery will rely in part on the arrangement with Entergy's unit to deliver electricity to the site.