Applied Digital Corp. 8-K

What Happened

• Applied Digital Corporation’s subsidiary, APLD ComputeCo 2 LLC, completed a private offering on March 10, 2026 of $2.15 billion aggregate principal of 6.750% Senior Secured Notes due 2031. The notes were sold under a March 3, 2026 purchase agreement (Goldman Sachs & Co. LLC as representative) to qualified institutional buyers (Rule 144A) and to non-U.S. persons (Regulation S). The notes were issued at 98.000% of par, bear interest at 6.750% per year payable semi‑annually (March 15 and September 15, beginning Sept 15, 2026), and mature March 15, 2031. Wilmington Trust, N.A. serves as trustee and collateral agent under the indenture.
• Separately, on March 6, 2026 the company’s Compensation Committee approved a $750,000 bonus (subject to payroll withholding) for CFO Saidal Mohmand for his role in financing the Polaris Forge 1 and 2 data center campuses.

Key Details

• Offering size: $2.15 billion aggregate principal; issue price: 98.000% of principal.
• Coupon and term: 6.750% interest, semi‑annual payments, maturity March 15, 2031; semi‑annual principal amortization as set in the indenture.
• Use of proceeds: to fund development/construction of 200 MW of critical IT load at Polaris Forge 2 (Harwood, ND, currently leased to Oracle) and to fund specified Project Accounts (including Debt Service Reserve), plus transaction fees and expenses. Proceeds were initially deposited into a segregated escrow account under an escrow agreement.
• Covenants & guarantees: notes are senior secured obligations of the Issuer with subsidiary guarantors; the parent provided a customary completion guarantee requiring Applied Digital to fund completion of construction periods if proceeds and available funds are insufficient. Redemption options begin March 15, 2028 (with earlier redemptions subject to make‑whole provisions and limited equity‑offer carveouts).

Why It Matters

• The transaction materially changes the company’s financing profile by adding $2.15B of secured, amortizing debt with a fixed 6.75% coupon, which will affect future interest and principal cash outflows. The specified use of proceeds targets expansion of the Polaris Forge 2 data center capacity (200 MW), which supports the company’s growth plans tied to that campus and its lease to Oracle.
• The indenture’s covenants and the parent completion guarantee create contractual limits and potential funding obligations that investors should note when assessing financial flexibility and project execution risk. The $750,000 CFO bonus is a one‑time compensation action tied to completed financings.