Applied Digital Corporation (NASDAQ: APLD) announced that its subsidiary APLD ComputeCo 3 LLC intends to offer $1.59 billion in senior secured notes due 2031 in a private placement to qualified institutional buyers.

The company plans to use proceeds from the offering to fund construction of 150 megawatts of critical IT load at the fourth building at its Polaris Forge 1 AI factory campus in Ellendale, North Dakota. Additional funds will repay debt under an existing credit agreement with Goldman Sachs Bank USA, establish debt service reserves, and cover transaction expenses.

The notes will be guaranteed by APLD ComputeCo 3's subsidiaries, including APLD ELN-04 HoldCo LLC, APLD ELN-04 LLC, and APLD ELN-04 LandCo LLC. The debt will be secured by first-priority liens on substantially all assets of the issuer and guarantors, excluding certain property, plus equity interests in APLD ComputeCo 3 held by parent company APLD HPC Holdings 2 LLC.

Applied Digital will provide a completion guarantee for the ELN-04 project, committing to fund APLD ComputeCo 3 as needed to ensure timely project completion.

The offering remains subject to market conditions and other factors, with no assurance regarding completion timing or final terms. The notes have not been registered under the Securities Act of 1933 and will only be offered to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S.

Applied Digital designs, builds and operates data centers for artificial intelligence, networking and blockchain workloads. The Dallas-based company was founded in 2021 and operates high-performance computing facilities.