Applied Digital plans to offer $2.15 billion in senior secured notes

Applied Digital Corporation, a leader in the creation and operation of cutting-edge, eco-friendly data centers and colocation services for Artificial Intelligence (AI), blockchain, and networking applications, has recently revealed plans for a significant financial move. The company’s subsidiary, APLD ComputeCo 2 LLC, has set its sights on raising $2.15 billion through a private offering of senior secured notes due in 2031. This financial undertaking is aimed at fueling the development and establishment of 200 megawatts of critical IT load at Polaris Forge 2, the AI Factory campus located in Harwood, North Dakota. The net proceeds generated from this offering will also be allocated towards the “Project Accounts,” ensuring the Debt Service Reserve Account and related expenses are covered.

To reinforce the offering, Applied Digital has disclosed that the Notes will be fully backed by a series of guarantees from APLD Compute 2’s current and future direct and indirect subsidiaries, known as the Guarantors. These entities, inclusive of APLD FAR-01 HoldCo LLC, APLD FAR-02 HoldCo LLC, and several other compositions, will secure the Notes and respective guarantees through first-priority liens on the assets of APLD Compute 2 and the Guarantors, with particular exclusions, as well as the equity interests of APLD Compute 2 held by APLD FAR Holdings LLC.

In conjunction with this financial step, Applied Digital will furnish customary completion guarantees to assure the seamless realization of the Polaris Forge 2 project. These guarantees entail the provision of financial backing to APLD Compute 2 as needed to ensure the timely execution of the project. Nevertheless, it is important to note that the success of this offering is contingent on various market conditions and external factors. As such, there exists uncertainty regarding the timing and terms of the completion of the offering.

The Notes issued as part of this private offering have not been registered under the Securities Act or other jurisdiction-specific securities laws. Therefore, the sale or offering of these Notes within the United States is subject to legal constraints unless carried out in accordance with the requisite registrations or exemptions. The offering is exclusively available to qualified institutional buyers under Rule 144A or non-U.S. persons in compliance with Regulation S.

In light of this financial maneuver, Applied Digital continues to solidify its standing within the industry. Recognized as the Best Data Center in the Americas for 2025 by Datacloud, the company’s dedication to designing, constructing, and managing high-performance, environmentally conscious data centers and colocation services for advanced technological applications underscores its commitment to innovation and sustainability in the digital age.