CoreWeave’s borrowing costs drop to 7% as AI data centre debt reprices
▼ Summary
– An Applied Digital subsidiary raised $1.59 billion in high-yield bonds to fund a fourth building at its Polaris Forge 1 campus.
– The new building will provide 150 megawatts of computing capacity for CoreWeave under a 15-year contract.
– The bonds were priced to yield 7%, a significant drop from the 10% yield investors previously demanded.
An Applied Digital subsidiary successfully raised $1.59 billion in the high-yield bond market this Tuesday, financing construction of a fourth building at its Polaris Forge 1 campus in North Dakota. The facility is designed to deliver 150 megawatts of computing capacity for CoreWeave under a long-term 15-year contract. Investors priced the bonds at a 7% yield, a notable decline from the 10% demanded in earlier deals.
This repricing signals a significant shift in the market for AI data centre debt. Borrowing costs are falling as lenders grow more confident in the revenue stability tied to long-term contracts with major cloud and AI firms. The lower yield reflects increased appetite for risk in the sector, particularly for projects backed by established operators like CoreWeave.
The Polaris Forge 1 campus expansion underscores the ongoing demand for high-performance computing infrastructure to support AI workloads. As more companies secure multi-year agreements, the financing environment for such projects is improving, making capital more accessible and cheaper for developers.
(Source: The Next Web)
