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TeraWulf Preps to Launch $3B Debt Financing Package to Support Data Center Operations
Bitcoin miner and computing company TeraWulf is preparing a $3 billion debt financing package to fund its development of data center operations, according to sources.
The Morgan Stanley-led financing is expected to launch imminently, sources said, adding that the deal will likely be a combination of both high-yield bonds and leveraged loans.
TeraWulf’s expected $3 billion deal will fund the expansion of its data centers via a structure supported by Google Inc., according to news reports.
TeraWulf’s deal is expected to be rated Ba2/BB, one high-yield investor noted this week, adding that it would likely come in the 6% pricing area as a result.
The investor added that there is a site visit to TeraWulf’s data center this week and that the deal will prepare to launch shortly thereafter.
Google has a substantial stake in TeraWulf and has supported the company’s expansion into high-performance computing. Google increased its backstop for TeraWulf to $3.2 billion in August, which also raised its pro forma equity ownership in the company to 14%.
TeraWulf would be one of several companies in the software and artificial intelligence sector using debt financing in recent months. Software company CoreWeave issued $1.75 billion of senior notes in July, and AI platform Verint is currently marketing a $1.5 billion leveraged loan, Octus recently reported.
In August, TeraWulf launched $850 million of 1% convertible senior notes due 2031, with a portion of the net proceeds to finance a portion of the data center expansion.
TeraWulf’s $850 million 2031 convertible bond was last indicated today, Oct. 7, at 122.8/123.63, according to Solve.
Morgan Stanley and TeraWulf did not respond to requests for comment.
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