Applied Digital, a designer, builder and operator of next-generation digital infrastructure, through its subsidiary, APLD Holdings 2, closed a $150 million senior secured debt financing with Macquarie Equipment Capital, a division of Macquarie Group’s commodities and global markets’ business. APLD Holdings 2 issued a promissory note for the full $150 million in gross proceeds on Nov. 27, 2024, and simultaneously repaid its obligations under the senior secured credit facility with CIM Group, removing encumbrances on assets outside of APLD Holdings 2, as well as the parent guarantee. The remaining net proceeds will be used to repay other outstanding debt and pay transaction expenses.
“We are thrilled to partner with Macquarie, a leader in global infrastructure investment with deep expertise in HPC-related infrastructure,” Wes Cummins, CEO of Applied Digital, said. “This financing improves our cost of capital for the Ellendale project and provides greater flexibility to support other growing areas of our business. The new structure removes the parent guarantee and liens from non-HPC entities, reflecting the value we’ve created through our previous financings and project execution. We believe this partnership will not only keep our Ellendale buildout on track but may also open the door to future opportunities with Macquarie as we look to scale our projects and expand into even larger endeavors.”
“We are proud to assist Applied Digital in this refinancing and look forward to supporting the continued development of its innovative Ellendale project, as well as future facilities that will be essential to the advancement of AI,” Joshua Stevens, associate director of Macquarie Group’s commodities and global markets business, said.
The 18-month note bears a low interest rate of 0.25% per annum, carries no commitment fee or original issue discount and is subject to an initial minimum return hurdle of 1.11x within the first four months of the note’s term that scales up to 1.35x over its term. In connection with this financing, Macquarie will receive warrants for 1,035,197 shares of Applied Digital common stock with a strike price of $9.66 per share.
Lowenstein Sandler acted as legal counsel to the company. Northland Capital Markets acted as sole placement agent to the company. Citizens JMP Securities acted as a financial advisor to the company. Latham & Watkins acted as legal counsel to Macquarie.
