The inaugural high-yield bond issuance tied to a Meta Platforms Inc. data center has drawn subscription demand exceeding four times its offering size, with attractive yields luring investors into the deal.
According to sources, U.S. data center operator CleanSpark Inc (NASDAQ: CLSK) received roughly $10 billion in orders from asset managers for its debut high-yield bond linked to Meta, against a deal size set at nearly $2.28 billion. The five-year notes were priced at 98.5 cents on the dollar, yielding 8.25%, a second person familiar with the matter said. That represents a premium of about 175 basis points over the average yield on BB-rated corporate bonds tracked by Bloomberg.
The pricing comes amid a surge in data center financing offerings and mounting investor concerns over excessive capital expenditures. Market participants have been demanding fatter risk premiums for data center debt, pushing up borrowing costs for AI infrastructure buildouts. Earlier this year, similar financings backed by investment-grade tenants were priced at yields below 6%.
Proceeds from the CleanSpark offering, led by Morgan Stanley, will fund construction of a data center in Sandersville, Georgia, according to a regulatory filing. The facility is fully leased to Anviran LLC, a Meta subsidiary, under a 20-year contract valued at $6.6 billion, per a CleanSpark presentation. The company said the data center is slated to begin operations in the fourth quarter of 2027, with Meta guaranteeing rent and operating expenses.
Meta's commitment to CleanSpark provides the junk-rated borrower with a predictable revenue stream to support its debt-funded, capital-intensive project. Data center developers have sold more than $3 billion in high-yield bonds so far this year, with most backed by long-term leases from hyperscale cloud providers including Oracle and Amazon, according to compiled data.
Las Vegas-based CleanSpark is among a growing number of publicly listed bitcoin miners pivoting into data center operations to support artificial intelligence applications. The company holds a market capitalization of approximately $3.63 billion.