Meta (META.US) related data center's first junk bond received more than four times as much subscription demand boosted premium issuance

The Zhitong Finance App learned that when the first Meta Platforms (META.US) related data center junk bond was issued, the subscription demand exceeded four times the issuance scale, and the attractive yield helped it attract investors. According to people familiar with the matter, the US data center operator CleanSpark (CLSK.US) issued the first high-yield bond linked to Meta Platforms Inc., and the asset management agency placed an order of about 10 billion US dollars for this issue, and the issuance scale was set at nearly 2.28 billion US dollars.

Another person familiar with the matter said that the five-year notes were priced at 98.5 cents of face value, and the yield was 8.25%. This is about 1.75 percentage points higher than the average level of bonds issued by BB-rated companies tracked by Bloomberg.

At a time when data center financing issuance is surging and market concerns about excessive capital expenditure are heating up, investors are already demanding higher premiums for data center financing, which is driving up the financing costs of AI infrastructure construction. Earlier this year, similar financing, backed by investment-grade tenants, issued yields as low as 6%.

According to a regulatory document, the CleanSpark financing, led by Morgan Stanley, will be used to fund the construction of a data center in Sandersville, Georgia.

According to a CleanSpark demo, the facility has been leased entirely to Meta subsidiary Anviran LLC under a $6.6 billion 20-year contract. The data center is expected to commence operations in the fourth quarter of 2027, and Meta will guarantee rent and operating expenses, the company said.

Meta's commitment to CleanSpark has provided this junk borrower with a predictable revenue stream to support it in borrowing for this expensive project. Data center developers have sold more than $3 billion in high-yield bonds so far this year, most of which are supported by long-term leases with hyperscale cloud vendors (including Oracle and Amazon), according to compiled data.

CleanSpark, headquartered in Las Vegas, is one of a growing number of publicly traded Bitcoin mining companies transforming into data center operators to support artificial intelligence applications. The company's market capitalization is approximately $36.3 billion.