Applied Digital Closes $375 Million Financing with SMBC to Support Ellendale HPC Campus
Applied Digital (APLD) has secured a $375 million financing agreement with Sumitomo Mitsui Banking (SMBC) for its Ellendale High Performance Computing (HPC) data center campus. The financing will be used for two primary purposes: repaying existing obligations under the Macquarie Capital senior secured note and advancing the development of the first and second data center buildings at the Ellendale HPC Campus.
The company plans to replace this interim SMBC loan with permanent project financing, which is not expected to be dilutive to APLD's common stock. The company aims to secure a hyperscaler lease for the Ellendale HPC Campus as part of its strategy toward permanent financing. Northland Capital Markets served as Capital Markets Advisor, while Milbank LLP and Lowenstein Sandler LLP provided legal counsel to Applied Digital.
Applied Digital (APLD) ha ottenuto un accordo di finanziamento di 375 milioni di dollari con Sumitomo Mitsui Banking (SMBC) per il suo campus di data center Ellendale High Performance Computing (HPC). Il finanziamento sarà utilizzato per due scopi principali: il rimborso delle obbligazioni esistenti sotto il senior secured note di Macquarie Capital e l'avanzamento dello sviluppo dei primi due edifici del data center presso il campus Ellendale HPC.
L'azienda prevede di sostituire questo prestito interinale SMBC con un finanziamento di progetto permanente, che non dovrebbe essere diluitivo per le azioni ordinarie di APLD. L'azienda mira a garantire un contratto di locazione hyperscaler per il campus Ellendale HPC come parte della sua strategia verso il finanziamento permanente. Northland Capital Markets ha servito come consulente per i mercati dei capitali, mentre Milbank LLP e Lowenstein Sandler LLP hanno fornito consulenza legale ad Applied Digital.
Applied Digital (APLD) ha conseguido un acuerdo de financiación de 375 millones de dólares con Sumitomo Mitsui Banking (SMBC) para su campus de centros de datos Ellendale High Performance Computing (HPC). La financiación se utilizará para dos propósitos principales: pagar las obligaciones existentes bajo la nota senior garantizada de Macquarie Capital y avanzar en el desarrollo de los primeros dos edificios del centro de datos en el campus Ellendale HPC.
La empresa planea reemplazar este préstamo interino de SMBC con financiación de proyecto permanente, que no se espera que diluya las acciones comunes de APLD. La empresa tiene como objetivo asegurar un contrato de arrendamiento hyperscaler para el campus Ellendale HPC como parte de su estrategia hacia la financiación permanente. Northland Capital Markets actuó como asesor de mercados de capitales, mientras que Milbank LLP y Lowenstein Sandler LLP proporcionaron asesoría legal a Applied Digital.
Applied Digital (APLD)는 Sumitomo Mitsui Banking (SMBC)와 3억 7천5백만 달러의 금융 계약을 체결했습니다. 이는 Ellendale High Performance Computing (HPC) 데이터 센터 캠퍼스를 위한 것입니다. 이 자금은 두 가지 주요 목적을 위해 사용됩니다: Macquarie Capital의 선순위 담보 노트에 대한 기존 의무 상환과 Ellendale HPC 캠퍼스의 첫 번째 및 두 번째 데이터 센터 건물 개발을 촉진하는 것입니다.
회사는 이 임시 SMBC 대출을 영구 프로젝트 자금 조달로 대체할 계획이며, 이는 APLD의 보통주에 대한 희석을 초래하지 않을 것으로 예상됩니다. 회사는 영구 자금 조달 전략의 일환으로 Ellendale HPC 캠퍼스를 위한 하이퍼스케일러 임대 계약을 확보하는 것을 목표로 하고 있습니다. Northland Capital Markets는 자본 시장 자문을 제공했으며, Milbank LLP와 Lowenstein Sandler LLP는 Applied Digital에 법률 자문을 제공했습니다.
Applied Digital (APLD) a sécurisé un accord de financement de 375 millions de dollars avec Sumitomo Mitsui Banking (SMBC) pour son campus de centres de données Ellendale High Performance Computing (HPC). Le financement sera utilisé à deux fins principales: le remboursement des obligations existantes sous la note senior garantie de Macquarie Capital et l'avancement du développement des premier et deuxième bâtiments du centre de données sur le campus Ellendale HPC.
L'entreprise prévoit de remplacer ce prêt temporaire de SMBC par un financement de projet permanent, qui ne devrait pas être dilutif pour les actions ordinaires d'APLD. L'entreprise vise à sécuriser un bail hyperscale pour le campus Ellendale HPC dans le cadre de sa stratégie de financement permanent. Northland Capital Markets a servi de conseiller en marchés de capitaux, tandis que Milbank LLP et Lowenstein Sandler LLP ont fourni des conseils juridiques à Applied Digital.
Applied Digital (APLD) hat eine Finanzierungsvereinbarung über 375 Millionen Dollar mit der Sumitomo Mitsui Banking (SMBC) für seinen Ellendale High Performance Computing (HPC) Datenzentrum-Campus gesichert. Die Finanzierung wird für zwei Hauptzwecke verwendet: die Rückzahlung bestehender Verpflichtungen aus der senior secured note von Macquarie Capital und die Förderung der Entwicklung der ersten beiden Gebäude des Datenzentrums im Ellendale HPC Campus.
Das Unternehmen plant, dieses interimistische SMBC-Darlehen durch eine dauerhafte Projektfinanzierung zu ersetzen, die voraussichtlich nicht zu einer Verwässerung der Stammaktien von APLD führen wird. Das Unternehmen strebt an, einen Hyperscaler-Mietvertrag für den Ellendale HPC Campus als Teil seiner Strategie zur dauerhaften Finanzierung zu sichern. Northland Capital Markets fungierte als Berater für die Kapitalmärkte, während Milbank LLP und Lowenstein Sandler LLP rechtliche Beratung für Applied Digital bereitstellten.
- Secured substantial $375 million financing for HPC campus development
- Financing is non-dilutive to shareholders
- Partnership with major financial institution (SMBC) validates business model
- Interim financing nature indicates dependency on future hyperscaler lease signing
- Additional debt burden on company balance sheet
Insights
The
Strategic Partnership Value: SMBC's involvement, as one of the world's leading data center financing platforms, provides strong institutional validation of Applied Digital's business model and HPC strategy. This partnership could potentially lead to additional financing opportunities as the company continues to scale its operations.
Financial Structure Benefits: The non-dilutive nature of this financing preserves shareholder value while providing substantial growth capital. The two-stage financing approach - starting with an interim loan to be replaced by permanent project financing - demonstrates sophisticated financial engineering that aligns with the company's development timeline.
Growth Catalyst: The financing directly supports the development of the first two data center buildings at the Ellendale HPC Campus, positioning Applied Digital to capture growing demand for high-performance computing infrastructure. The company's strategy to secure a hyperscaler lease before transitioning to permanent financing indicates a disciplined approach to risk management and capital deployment.
Market Position Enhancement: This financing strengthens Applied Digital's competitive position in the HPC data center market. The ability to secure institutional financing of this magnitude suggests the company has successfully transformed its narrative from a crypto-mining infrastructure provider to a legitimate player in the broader digital infrastructure space.
Risk Considerations: While the financing provides immediate capital access, the company's ability to secure favorable terms for permanent project financing will depend on successfully attracting a hyperscale tenant. This creates a clear milestone for investors to monitor in evaluating the company's execution capabilities.
- Sumitomo Mitsui Banking Corporation (“SMBC”) leads a
$375 million financing for the Company’s Ellendale High Performance Computing (“HPC”) data center campus (the “Ellendale HPC Campus”) - Provides further validation of the Ellendale HPC Campus through a partnership with one of the world’s leading data center financing platforms
DALLAS, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the "Company"), a designer, builder, and operator of next-generation digital infrastructure for HPC applications, announced today that the Company, through its HPC subsidiary APLD HPC Holdings LLC (“APLDH”), closed a
“We are excited to partner with SMBC on this financing and appreciate their confidence in our vision,” said Saidal Mohmand, Chief Financial Officer of Applied Digital. “This financing enables us to advance the development of our Ellendale HPC Campus, and we look forward to strengthening our relationship with SMBC as we continue scaling our HPC data center platform. We expect this financing to bridge us to more permanent project financing once we get a hyperscaler lease signed for the Ellendale HPC Campus.”
“Structuring and leading this landmark transaction is a great start to a partnership with Applied Digital,” said Nick Donias, Director, Infrastructure Finance – Americas at SMBC. “We look forward to continuing to work with Applied Digital as they build out the next generation of hyperscale data centers.”
The Company plans to replace this interim SMBC loan with a permanent project financing. The Company does not expect this permanent project financing to be, and the current loan is not, dilutive to the Company’s common stock.
Northland Capital Markets acted as Capital Markets Advisor to the Company. Milbank LLP and Lowenstein Sandler LLP acted as legal counsel to the Company. Paul Hastings LLP acted as legal counsel to SMBC.
About Applied Digital
Applied Digital (Nasdaq: APLD) develops, builds and operates next-generation data centers and cloud infrastructure. Different by design, the Company’s purpose-built facilities are engineered to unleash the power of accelerated compute and deliver secure, scalable and sustainable digital hosting, along with turnkey CSaaS and GPU-as-a-Service solutions. Backed by deep hyperscale expertise and a robust pipeline of available power, Applied Digital accommodates AI Factories and beyond to support the world’s most exacting AI/ML, blockchain and high-performance computing (HPC) workloads.
About SMBC
SMBC Group is a top-tier global financial group. Headquartered in Tokyo and with a 400-year history, SMBC Group offers a diverse range of financial services, including banking, leasing, securities, credit cards, and consumer finance. The Group has more than 150 offices and 120,000 employees worldwide in nearly 40 countries. Sumitomo Mitsui Financial Group, Inc. (SMFG) is the holding company of SMBC Group, which is one of the three largest banking groups in Japan. SMFG’s shares trade on the Tokyo, Nagoya, and ADRs on the New York (NYSE: SMFG) stock exchanges. In the Americas, SMBC Group has a presence in the U.S., Canada, Mexico, Brazil, Chile, Colombia, and Peru. Backed by the capital strength of SMBC Group and the value of its relationships in Asia, the Group offers a range of commercial and investment banking services to its corporate, institutional, and municipal clients. It connects a diverse client base to local markets and the organization’s extensive global network. The Group’s operating companies in the Americas include Sumitomo Mitsui Banking Corp. (SMBC), SMBC America’s Holdings, Inc., SMBC Nikko Securities America, Inc., SMBC Nikko Securities Canada, Ltd., SMBC Capital Markets, Inc., SMBC MANUBANK, JRI America, Inc., SMBC Leasing and Finance, Inc., Banco Sumitomo Mitsui Brasileiro S.A., and Sumitomo Mitsui Finance and Leasing Co., Ltd. (collectively, SMBC Group Americas Division). For more information, please visit www.smbcgroup.com.
Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations of words, such as “will,” “continue,” “build,” “future,” “increase,” “drive,” “believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,” “expect,” “project” and “predict.” Other examples of forward-looking statements may include, but are not limited to, (i) statements of Company plans and objectives, including our evolving business model, or estimates or predictions of actions by suppliers, (ii) statements of future economic performance, (iii) statements of assumptions underlying other statements and statements about the Company or its business, (iv) the Company’s ability to effectively apply the net proceeds from the transaction as described above, and (v) the Company’s plans to obtain future project financing. You are cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations and projections. These risks, uncertainties, and other factors include: our ability to complete construction of the Ellendale HPC data center; our ability to complete the negotiation and execution of the definitive transaction documents required to close the Macquarie Asset Management facility; our ability to raise additional capital to fund the ongoing data center construction and operations; our dependence on principal customers, including our ability to execute leases with key customers, including leases for our Ellendale HPC campus; our ability to timely and successfully build new hosting facilities with the appropriate contractual margins and efficiencies; power or other supply disruptions and equipment failures; the inability to comply with regulations, developments and changes in regulations; cash flow and access to capital; availability of financing to continue to grow our business; decline in demand for our products and services; maintenance of third party relationships; and conditions in the debt and equity capital markets. Information in this release is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information contained in these materials, except as required by law.
Investor Relations Contacts
Matt Glover or Ralf Esper
Gateway Group, Inc.
(949) 574-3860
APLD@gateway-grp.com
Media Contact
Buffy Harakidas, EVP and Jo Albers
JSA (Jaymie Scotto & Associates)
jsa_applied@jsa.net
(856) 264-7827
FAQ
What is the size of APLD's new financing agreement with SMBC?
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