This article first appeared on GuruFocus.
TeraWulf Inc. (WULF, Financials) plans to raise about $3 billion in debt to expand its data center operations, with financial backing from Google (GOOGL, Financials), Chief Financial Officer Patrick Fleury told Bloomberg.
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The debt will likely be issued through the high-yield bond market or leveraged loans. Morgan Stanley is arranging the potential transaction, which could launch in October.
Google has provided a $1.4 billion backstop commitment to support the deal, bringing the total financing package to $3.2 billion. The support comes as large technology companies continue investing in energy-intensive data centers to meet rising demand for artificial intelligence and digital infrastructure.
Shares of TeraWulf fell nearly 4% Thursday to $10.97, while Google’s stock dipped 0.5% to $246.57. Investors will watch the progress of the debt issuance and details of how the expansion could affect TeraWulf’s growth and balance sheet.
The next catalyst for both companies will be the debt market’s reception to the planned issuance in October.