IREN Secures $3.6B Financing for Microsoft GPU AI Buildout at ~5.9% Cost
IREN has secured about $3.6 billion of debt financing to fund GPU infrastructure tied to its Microsoft cloud-services contract, giving the bitcoin miner-turned-AI infrastructure developer a large pool of project-level capital at an effective interest rate of roughly 5.9% before fees and hedging costs.
The financing, entered into on May 29 through IREN’s wholly owned subsidiary IE US Hardware 3 LLC, consists of about $1.5 billion in delayed draw term loans and $2.1 billion of senior notes due Dec. 31, 2031, according to a filing with the SEC on Monday. The proceeds will partially fund GPU infrastructure and related costs for IREN’s agreement with Microsoft to provide dedicated GPU services in tranches at its data center facilities in Childress, Texas.
The structure places IREN within a widening wave of AI infrastructure financings, where lenders are increasingly underwriting projects against GPUs, hyperscaler-backed contracts, power access and data center infrastructure. Year-to-date, CoreWeave (NASDAQ: CRWV), Core Scientific (NASDAQ: CORZ), and Hut 8 (NASDAQ: HUT) alone have collectively secured loan facilities of over $15 billion backed by GPU hardware and infrastructure builtout.
IREN’s deal also extends a broader shift in miners’ cost of capital. For years, bitcoin miners typically borrowed against volatile mining economics, bitcoin holdings, mining machines or corporate balance sheets, often at expensive rates that reflected commodity exposure and cyclical cash flows. The AI data center boom has changed that equation, as described in a previous Miner Weekly newsletter issue.
IREN’s financing continues that trend. The $2.1 billion senior notes carry a fixed coupon of 5.96%. The $1.5 billion delayed draw term loan bears interest at term SOFR plus 2.25 percentage points. Based on the late-May 3-month CME Term SOFR of about 3.66%, that implies a current floating-rate coupon of about 5.91% on the term loan. Weighted across the $3.6 billion package, the indicative blended cash interest rate is about 5.94%, before commitment fees, amortization, hedging costs or other financing expenses.
The filing also says IREN must pay a 0.40% annual commitment fee on the undrawn portion of the term-loan commitments during the delayed draw availability period. Borrowings under the term loan and issuances of the notes will be made in tranches and are available until May 29, 2027, subject to certain extensions. Both the term loans and notes mature on Dec. 31, 2031, or earlier if the final service fee for all tranches under the Microsoft contract has been paid in full.
IREN’s parent company is providing limited guarantees, but the filing says those guarantees do not cover Hardware 3’s obligations directly. The parent guarantee is limited to the performance of another IREN subsidiary as manager under a managed-services agreement, and to certain shortfalls if Microsoft does not accept or terminate a tranche of GPU services and the shortfall is not covered through disposal or remarketing of the related GPU infrastructure.
The financing includes a minimum debt service coverage ratio of 1.05 to 1.00, tested quarterly, subject to equity cure rights. The credit agreement also contains mandatory prepayment provisions tied to weaker coverage metrics or higher leverage, including if the debt service coverage ratio falls below 1.10 to 1.00 for six consecutive months, if projected coverage for the third and fourth tranches falls below 1.20 to 1.00, or if the loan-to-cost ratio exceeds 65%.
