Nvidia-Tied Data Center Taps Junk-Debt Market for $4.5 Billion
A data center developer is seeking $4.54 billion in junk-debt financing for an artificial intelligence project tied to Nvidia Corp., testing investor appetite after a recent surge in offerings.
An entity backed by asset manager Tract Capital Management LP and Fleet Data Centers I LP is selling the five-year notes, a person with direct knowledge of the matter said. Initial price talk is for a yield in the high 6% area, the person added, asking not to be identified while disclosing private information.
Proceeds from the sale — run by JPMorgan Chase & Co. — will help finance a portion of the construction of a 200-megawatt data center and substation in Storey County, Nevada, and reimburse Fleet Data Centers for prior equity contributions.
In February, the developer raised $3.8 billion from a debut junk-bond sale to help finance the project, expected to be leased by Nvidia Corp. The deal attracted $14 billion of orders from investors.
That’s the latest in a series of risky debt offerings to help finance computing capacity as the rapid expansion of AI has created an unprecedented shortage of data-center space, graphics-processing unit chips and quick access to electricity to power it all.
An investor call will be held 10 a.m. Eastern Time.
Firms tied to the buildout have raised more than $22 billion from riskier bonds so far this year, data compiled by Bloomberg show. That includes a record $5.7 billion deal to fund Alphabet Inc.’s Google-linked data centers.
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