TL;DRCipher Digital is raising $810M in junk bonds at 6.25% to fund its Stingray data centre in West Texas, leased to Amazon under a 15-year contract.
Cipher Digital is raising $810 million from a junk-bond sale to finance a data centre in West Texas that Amazon will lease for 15 years, according to Bloomberg. The deal, pitched at a yield of about 6.25 per cent, will fund the remaining construction costs of Cipher’s Stingray Facility, a 100-megawatt computing campus in Andrews County. Morgan Stanley, Goldman Sachs, Wells Fargo, Banco Santander, and SMBC Nikko Securities are running the offering.
The transaction includes an unusual structural provision. Rather than requiring Cipher to repay a fixed amount of principal each year, the amortisation schedule is tied to the cash the project generates after completion. Most high-yield data centre financings use fixed repayment schedules, making this deal a closer cousin of project finance than traditional corporate junk debt.
Cipher Digital, formerly known as Cipher Mining, began as a cryptocurrency miner before pivoting to high-performance computing infrastructure. The company decommissioned its bitcoin mining operations in February and now holds approximately 600 megawatts of contracted HPC capacity with Amazon Web Services, Google, and Fluidstack. Management has cited roughly $11.4 billion in contracted revenue across its portfolio.
