IREN Ltd 8-K

What Happened

• IREN Ltd (through wholly owned subsidiary IE US Hardware 3 LLC, “Hardware 3”) announced on May 29, 2026 that it entered into financing agreements providing approximately $3.6 billion to fund acquisition of GPU infrastructure and related costs to support Hardware 3’s November 2, 2025 contract with Microsoft to provide dedicated GPU services at Childress, Texas. The financing consists of an approximately $1.5 billion delayed-draw term loan (DDTL) and $2.1 billion aggregate principal of 5.96% senior notes due December 31, 2031. Availability for draws and note issuances runs through May 29, 2027.

Key Details

• Total financing: ~ $3.6 billion = ~$1.5B DDTL (term SOFR + 2.25%; 0.40% commitment fee on undrawn portion) + $2.1B senior notes at 5.96% fixed interest. Maturity: Dec 31, 2031 (or earlier if final Microsoft service fee paid).
• Security and guarantees: Hardware 3’s obligations are secured by its assets (including the GPUs), a pledge of 100% of Hardware 3 equity, and the Microsoft contract cash flows. The Parent (IREN) provided limited guarantees tied to manager performance and certain shortfalls if Microsoft does not accept or terminates a tranche.
• Covenants and tests: Common Terms Agreement requires a minimum debt service coverage ratio of 1.05:1.00 (quarterly test), with customary affirmative/negative covenants and default/prepayment triggers (e.g., sustained coverage below 1.10:1.00 or loan-to-cost >65%).
• Hedges: Hardware 3 entered interest-rate and power cost hedge agreements (notional ~85–105% of expected amortization); hedges are temporarily guaranteed by the Parent until moved to a secured structure.

Why It Matters

• This financing creates substantial new secured debt and obligations at Hardware 3 that are tied directly to the Microsoft GPU services contract. Investors should note the size ($3.6B), the collateral (GPU assets and contract cash flows), fixed-rate notes (5.96%) and floating-rate loan exposure (SOFR + 2.25%), and the covenant coverage tests that could affect repayment or trigger prepayments/defaults if cash flow metrics weaken. The Parent’s guarantees are limited in scope, so direct repayment responsibility rests primarily with Hardware 3 and the pledged project assets. Copies of the agreements will be filed as exhibits to the Parent’s FY2026 Form 10-K.