Applied Digital Expands Credit Facility to $430M as AI Factory Buildout Continues
Applied Digital has increased the size of its secured revolving credit facility to $430 million, giving the data center developer additional borrowing capacity as it continues to finance its AI infrastructure expansion.
The company disclosed in a Friday filing that its wholly owned subsidiary, APLD Intermediate HoldCo LLC, entered into an incremental assumption agreement on June 26 that amended a credit agreement originally dated May 29. The amendment increased the aggregate principal amount of revolving credit commitments under the facility to $430 million.
The revolving credit facility matures on May 28, 2029, and includes a $430 million letter-of-credit sub-facility, which reduces overall availability when used. The agreement also allows the borrower to increase revolver commitments or draw on term loans by up to an additional $120 million, bringing total potential capacity under the credit facility to $550 million.
Borrowings under the facility carry an interest rate based on either Term SOFR or a base rate, at Applied Digital’s option. Term SOFR-based loans bear an applicable margin of 2.25%, while base-rate loans carry a margin of 1.25%.
Borrowings under the facility carry an interest rate based on either Term SOFR or a base rate, at Applied Digital’s option. Term SOFR-based loans bear an applicable margin of 2.25%, while base-rate loans carry a margin of 1.25%.
Based on the one-month CME Term SOFR rate of 3.64392% on June 26, the filing date, SOFR-based borrowings would carry an effective rate of about 5.89%, before any applicable fees. Base-rate borrowings would carry an effective rate of about 8.00%, based on the Wall Street Journal prime rate of 6.75% plus the 1.25% margin.
The facility is fully and unconditionally guaranteed by Applied Digital and each of its restricted subsidiaries, subject to customary exceptions. The agreement also includes provisions intended to allow separate financing for data center and related development projects by individual project entities.
Applied Digital’s expanded credit capacity comes as the company continues to build out large-scale campuses targeting AI and high-performance computing customers. The company previously said the original revolving credit facility would be used to support pre- and post-lease development of its data center projects, as well as working capital and general corporate purposes.
The filing did not say how much of the amended facility has been drawn.
