Applied Digital (OTCMKTS:APLD) Secures $150 Million Senior Secured Note with Macquarie Equipment Capital

Applied Digital Corporation (OTCMKTS:APLD) recently announced the closure of a significant financial agreement with Macquarie Equipment Capital, Inc. This deal involves a $150 million senior secured debt financing. The funds from this financing endeavor are intended to refinance an existing credit facility with a previous senior lender, further supporting Applied Digital’s Ellendale High Performance Computing (“HPC”) data center campus. The move also helps the company avoid facing increased costs associated with specific return hurdle deadlines.

The specifics of the agreement on November 27, 2024, saw APLD ELN-02 Holdings LLC, an Applied Digital subsidiary, and Macquarie Equipment Capital, Inc. enter into a promissory note. This note provides for a loan of $150 million, carrying an interest rate of 0.25% per annum. It is set to mature on the earlier of the date the loan is accelerated or May 27, 2026, with specific prepayment conditions related to the ELN-02 Project.

Additionally, as part of the agreement, Applied Digital issued warrants to Macquarie Equipment Capital, Inc., allowing the latter to purchase up to 1,035,197 shares of the company’s common stock at a specified exercise price. The terms in these warrants include exercise periods and prices, emphasizing a private placement pursuant to the Securities Act of 1933.

The financing package with Macquarie Equipment Capital, Inc. enables Applied Digital to streamline its capital structure, enhancing the cost-efficiency of its Ellendale project. The collaboration also eliminates encumbrances such as cross collateralization of additional assets, thus providing the company with increased flexibility for future corporate and project-level debt finance operations.

The partnership between Applied Digital and Macquarie Equipment Capital, Inc. reflects a strategic move that sets the stage for mutual growth and potential future collaborations. Applied Digital is particularly optimistic about the opportunities this financing arrangement can facilitate, not just in supporting its current projects but also potentially opening doors for scaling up and venturing into expanded undertakings in the future.

The press release issued by Applied Digital Corporation on December 2, 2024, emphasized this significant financial milestone, underlining the company’s strong position in the evolving digital infrastructure and high-performance computing sectors.

The terms and conditions of this transaction, as well as the projections for future activities resulting from the partnership, showcase Applied Digital’s strategic initiatives and its commitment to delivering cutting-edge solutions in the field of data center operations and GPU cloud services. This transaction aligns with the company’s ongoing focus on addressing the diverse needs of a rapidly advancing technological landscape.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Applied Digital’s 8K filing here.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services.