727 FinancePANews October 13 news, according to TheEnergyMag, Nasdaq-listed company Cipher Digital plans to raise funds for its Barber Lake project and high-performance computing (HPC) data center business expansion through the issuance of $850 million in zero-coupon convertible bonds.
Cipher Digital stated that the private placement can be expanded to up to $1 billion, and if the initial purchasers exercise their option to purchase additional bonds, an additional $150 million in bonds will be issued. At the same time, the company plans to convert some of its 1.75% coupon convertible bonds due in 2030 into common stock. The company had previously adjusted the planning for its Barber Lake data center project located in Colorado City, Texas, and signed agreements with Fluidstack and an undisclosed AI laboratory to extend the project contract term from 10 years to 20 years, raising expected contract revenue from $3.8 billion to more than $9 billion.
Under the agreements, Cipher Digital will bear the first $359.3 million of project cost overruns, and any additional costs beyond that amount will be half compensated by the tenant through future rent. The proceeds from this financing will be used to increase equity investment in the Barber Lake project, advance the development of near-term computing infrastructure projects, expand the data center asset portfolio, and for general corporate purposes.
Cipher Digital was previously named Cipher Mining and changed its name in February this year to reflect the company's transition to the high-performance computing infrastructure sector.