Applied Digital Raises $2.35B in High-Yield Bonds to Finance CoreWeave-Backed AI Data Center in North Dakota

Applied Digital Corp. has raised $2.35 billion in high-yield debt to fund construction of an AI-focused data center campus in Ellendale, North Dakota, betting that long-term lease commitments from CoreWeave will underpin the project's economics. The senior secured notes carry a 9.25% coupon and were priced at 97 cents on the dollar, implying an effective yield of about 10%. The private offering was completed in November 2025, and the notes mature in 2030. Proceeds are slated for development of AI and high-performance computing facilities at the Polaris Forge 1 campus. CoreWeave's contracted capacity at the site has already increased from 250 megawatts to 400 megawatts, according to the company. Applied Digital (Nasdaq: APLD) is positioning itself as a landlord to the AI buildout, constructing specialized high-performance computing data centers and leasing capacity to cloud providers and AI companies under long-term agreements. CoreWeave is the anchor tenant for Polaris Forge 1, a key selling point for investors but also a central credit risk, given the heavy reliance on a single customer. Management has pointed to CoreWeave's long-term leases as a major support for the financing. The contracts are expected to generate roughly $5 billion to $11 billion in revenue over an approximately 15-year term. Investor interest was supported by the high yield on secured debt and the 3% discount to par at issuance. The notes are rated below investment grade, placing them in junk territory. Bondholders benefit from a senior secured position in the capital structure, giving them priority claims on assets if the project underperforms. Execution remains a key variable. Applied Digital is taking on a large-scale construction effort, and delivering a 400 MW campus on schedule and within budget is a significant undertaking. The transaction also highlights the broader financing wave around AI infrastructure. CoreWeave, which began as a crypto mining business before pivoting to GPU cloud computing, has raised billions across debt and equity and has shown a willingness to sign 15-year leases to secure long-duration capacity. For Applied Digital, the core question is concentration risk: the bond thesis depends heavily on CoreWeave's ability to remain solvent and expand over the next 15 years.