CleanSpark closes $2.276 billion junk bond deal for Georgia data center

Junk bond financing of the data center buildout continues. 

CleanSpark, a Henderson, Nevada-based bitcoin miner building data centers for AI and other computing workloads, just announced a high-yield bond deal that, it says, will help it complete a large data center project.

It has closed a $2.276 billion sale of senior secured notes carrying a 7.875 percent interest rate to finish a data center in Sandersville, Georgia, where the bitcoin miner is trying to establish a second business leasing infrastructure for artificial intelligence and other computing workloads.

The notes, issued by an indirect CleanSpark subsidiary, mature in 2031. They were sold at 98.5 percent of face value, so the offering price was below the amount the issuer must repay. Morgan Stanley & Co. represented the initial purchasers, according to CleanSpark’s SEC filing. The private sale was directed at qualified institutional buyers and certain investors outside the United States. 

The Sept. 25 filing says the proceeds will “finance the remaining cost of the Sandersville Facility.” 

CleanSpark also says it will use the money to reimburse earlier contributions to the project and fund debt service reserves.

In addition to operating bitcoin mining facilities, it has been assembling land, power and data center sites for a broader computing infrastructure business. The company says it controls a U.S. portfolio exceeding 1.8 gigawatts of power, land and data centers. 

That portfolio figure spans assets in different stages of development; it is not a measure of data center capacity already delivering AI workloads.

Beyond Sandersville, CleanSpark is developing data center sites in Sealy and Brazoria County, Texas, where its prospective tenant has an exclusivity arrangement covering up to 885 megawatts of secured and planned power capacity.

Fitch Ratings gave the new notes an expected rating of BB-, below investment grade, on Sept. 18, a week before the sale closed. CleanSpark had initially proposed a $2.227 billion offering before closing the larger $2.276 billion sale.

Sandersville is the clearest commercial test of the shift from bitcoin mining. CleanSpark has signed a 20-year lease with a global technology company for 175 megawatts of critical IT load at the Georgia campus. The tenant is Anviran, LLC, a Meta Platforms subsidiary, and Meta guarantees rent and operating expenses, according to a CleanSpark investor presentation filed with the SEC on Sept. 17. 

CleanSpark estimates $6.6 billion of contracted revenue over the initial term, with deliveries expected to begin in the fourth quarter of 2027. Those are future payments tied to a project that still must be completed and delivered, not revenue already earned.

The proposed economics help explain the size of the borrowing. CleanSpark has estimated landlord project costs of $10 million to $12 million per megawatt of critical IT load. At 175 megawatts, that implies roughly $1.75 billion to $2.1 billion of project costs under the company’s estimate. The $2.276 billion bond principal also covers reimbursement of earlier contributions and reserves; the bonds’ discounted issue price means cash raised before fees is less than principal.

CleanSpark’s existing business has had a difficult year. In the June quarter, bitcoin mining revenue fell to $138 million from $198.6 million a year earlier. The company reported a $239.8 million net loss, compared with $257.4 million of net income in the prior-year quarter. For the first nine months of its fiscal year, it reported a $996.9 million net loss. Changes in the reported value of its bitcoin holdings were a major part of that nine-month result.

At the end of June, CleanSpark reported $202.6 million in cash and about $1.78 billion of debt outstanding, net of discounts and issuance costs. That balance-sheet snapshot predates the new Sandersville notes. 

The company also held bitcoin, an asset whose value can move sharply with the market.