Applied Digital’s subsidiary, APLD Compute, has raised a $2.35 billion senior secured notes offering due 2030, with proceeds earmarked for the construction of 100‑MW and 150‑MW data‑center facilities at Polaris Forge 1, repayment of the aggregate principal balance of existing debt under the February 11, 2025 Credit and Guaranty Agreement, and the establishment of a debt‑service reserve account.
The notes are fully guaranteed by APLD Compute and its subsidiaries, including APLD ELN‑02 HoldCo LLC and APLD ELN‑03 HoldCo LLC, and are secured by first‑priority liens on the subsidiaries’ assets and project accounts. This structure gives investors a strong collateral base while allowing Applied Digital to leverage its growing portfolio of AI‑factory campuses to secure favorable borrowing terms.
Applied Digital has posted rapid revenue growth in recent quarters—its Q1 2026 revenue rose 84% year‑over‑year to $64.2 million—yet the company continues to grapple with thin margins on tenant fit‑out services and high debt levels. The new debt offering is therefore a strategic move to refinance existing obligations, reduce leverage, and free up capital for expansion without diluting shareholders. By consolidating debt under a single, long‑term instrument, the company can also lock in a lower interest rate and extend its debt maturity profile.
The financing aligns with a broader market trend: demand for AI‑ready data‑center capacity is accelerating as hyperscalers and enterprise customers seek low‑latency, high‑throughput infrastructure. Applied Digital’s Polaris Forge campuses, which have already secured a 15‑year lease for 200 MW at Polaris Forge 2 and a long‑term agreement with CoreWeave for Polaris Forge 1, position the company to capture this demand. Management has emphasized that the debt facility will enable the firm to accelerate construction timelines and maintain its competitive edge in the AI infrastructure market.
The announcement was met with a positive market reaction, reflecting investor confidence in the company’s ability to secure substantial debt to fund its growth strategy. Analysts noted that the financing strengthens Applied Digital’s balance sheet and supports its aggressive expansion plans amid a robust AI‑infrastructure cycle.
The notes will be serviced from the debt‑service reserve account, and the company expects the new capital to support the completion of Polaris Forge 1’s 250‑MW capacity by the end of 2026, positioning it to meet the projected demand for AI compute power in the coming years.
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