Meta-Tied Data Center Prices Junk Bond Amid Blowout Demand

The first junk-bond offering for a data center tied to Meta Platforms Inc. attracted demand more than four times the deal’s size, with juicy yields helping to lure investors.

Money managers placed orders of about $10 billion for CleanSpark Inc.’s debt sale, set at almost $2.28 billion, according to people familiar with the matter.

The five-year notes priced at 98.5 cents on the dollar to yield 8.25%, a separate person said, asking not to be identified because they are not authorized to speak publicly. That’s roughly 1.75 percentage points more than the average for debt issued by BB rated firms tracked by Bloomberg.

Investors have demanded higher premiums for data center financings amid a surge in such offerings and growing concerns about excessive capital spending, raising funding costs for the AI infrastructure buildout. Similar financings backed by investment-grade tenants were sold at yields as low as below 6% earlier this year.

The CleanSpark fundraising, led by Morgan Stanley, will help finance construction of a data center in Sandersville, Georgia, according to a regulatory filing.

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

Meta’s commitment to CleanSpark gives the junk-rated borrower a predictable revenue stream to support borrowing for a costly project. Data center developers have now sold more than $3 billion of high-yield bonds so far this year, with most of them backed by long-term leases with hyperscalers including Oracle Corp. and Amazon.com Inc., according to Bloomberg-compiled data.

CleanSpark didn’t respond to a request for comment, while Morgan Stanley declined to comment.

Las Vegas-based CleanSpark is among a growing number of public Bitcoin-mining companies that are becoming data-center operators to support artificial intelligence applications. The company has a market value of roughly $3.63 billion.