TeraWulf Inc. is set to raise approximately $3.5 billion in debt to finance the construction of an AI data center campus in Kentucky, featuring a core agreement with Anthropic for leasing.
The financing plan will use a combination of leveraged loans and high-yield bonds, managed by Morgan Stanley. This initiative marks TeraWulf's first foray into the leveraged loan sector, following prior successes in raising $1.3 billion and $3.2 billion in high-yield debt in the preceding months.
Why This Matters
This project signals a notable pivot for TeraWulf from traditional Bitcoin mining to AI data infrastructure, aligning with the growing demand for AI computing capabilities.
- Projected revenue from the facility is around $19 billion over the lease term.
- The data center will provide 401 megawatts of computing capacity, with operations anticipated to start in late 2027.
- Lease agreement with Anthropic includes options for two additional five-year extensions.
Trading on Thursday reflected a positive sentiment surrounding TeraWulf, with shares of WULF increasing by 2.43%, reaching a price of $23.39. Morgan Stanley has upgraded its price target for the stock from $66.50 to $72, reinforcing its ‘Overweight’ rating amidst strong demand for AI infrastructure.
Future Developments to Monitor
Investors are advised to pay attention to several upcoming events, including the official launch of the financing later this year and the full operational rollout of the Kentucky facility. Additionally, the impact of TeraWulf’s decision to sell its 50.1% stake in the Abernathy Joint Venture, valued at approximately $450 million, is yet to be fully realized in the market.
This material is for informational purposes only and should not be considered as financial advice.
