Investing.com - TeraWulf Inc. is exploring access to the leveraged loan market for its AI infrastructure expansion after completing a landmark junk bond sale, the company’s Chief Financial Officer Patrick Fleury said in an interview with Bloomberg. The data center firm is working with Morgan Stanley (NYSE:MS) and other banks on developing loan products, though its next financing deal will still likely be a high-yield bond.
TeraWulf sold $3.2 billion of high-yield bonds in October to expand a data center in New York, marking the biggest junk sale led by one Wall Street institution in more than three decades. The deal, the first ever for a crypto miner, was to finance a portion of its data center expansion at its Lake Mariner campus in Barker, New York. TeraWulf received more than $11 billion worth of orders from investors drawn by a backstop from Alphabet Inc.’s (NASDAQ:GOOGL) Google, which is set to guarantee the debt once the facility is running.
Fleury said TeraWulf and many of its peers are actively working with banks on loan products. The plumbing is largely there and the market is simply waiting for additional transactions to establish precedent, he said.
Accessing loan investors provides a route to the collateralized loan obligation market, which represents the biggest buyers of leveraged loans, according to Fleury. That opens up a significant new source of capital for the sector, he said.
TeraWulf, which is pivoting from its bitcoin miner roots, has been expanding its data center footprint and recently acquired a high-performance computing development site in Eastern Kentucky. Given the scale of capital required to build HPC infrastructure, expanding the available financing toolkit is an important step in the maturation of the industry, Fleury said.
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