TL; DR
Cipher Digital is raising $810 million in 6.25% bonds to finance its Stingray data center in West Texas, which it has leased to Amazon under a 15-year deal.
Cipher Digital is raising $810 million in a senior bond sale to finance a data center in West Texas that Amazon will lease for 15 years. According to Bloomberg. The deal, which closes at a yield of about 6.25 percent, will fund the remaining construction costs of Cipher’s Stingray Facility, a 100-megawatt computing campus in Andrews County. Morgan Stanley, Goldman Sachs, Wells Fargo, Banco Santander and SMBC Nikko Securities are managing the offering.
The transaction includes an unusual structural provision. Instead of requiring Cipher to pay a fixed amount of principal each year, the amortization schedule is tied to the cash it generates after the project is completed. Most high-yield data center financings use fixed payment schedules, making this deal more akin to project financing than traditional corporate junk debt.
Cipher Digital, formerly known as Cipher Mining, started as a cryptocurrency miner before moving into high-performance computing infrastructure. The company shut down bitcoin mining operations in February and currently has about 600 megawatts of contracted HPC capacity with Amazon Web Services, Google and Fluidstack. Management reported contract revenue of approximately $11.4 billion across the portfolio.
The Stingray offering is Cipher’s third high-yield bond sale in four months. Black Pearl Compute subsidiary in February It raised $2 billion in a deal that attracted more than $13 billion in ordersAn oversubscribed ratio of 6.5 to one shows how aggressively fixed income investors are pursuing exposure to AI infrastructure. Black Pearl is a separate data center campus leased by Amazon in Texas, which Cipher said is backed by a 15-year, 300-megawatt AWS lease that will generate about $5.5 billion in revenue under the deal.
The timing is remarkable. In the $810 million offering, Amazon launched a C$14 billion (US$10 billion) investment-grade bond sale in Canadian dollars, the largest corporate bond offering on record in that currency. Together, the two deals illustrate the two-way debt market that has sprung up around AI infrastructure: hyperscalers borrow at investment grade in global currencies, while smaller companies building data centers tap the junk market with yields of between 6 and 8 percent.
This two-track structure has become a defining feature of AI funding in 2026. Tech giants like Amazon and Alphabet have pledged their creditworthiness to high-income borrowers by signing long-term leases for facilities developed by smaller firms. Hyperscaler’s lease commitment is what makes a junk-rated issuer like Cipher investable, and investors have responded accordingly. Combined 2026 AI capital among the five largest hyperscalers is now on track to exceed $650 billionand debt markets absorb much of the downstream financing.
Cipher is not alone in riding this wave. GPU cloud provider CoreWeave, which went public earlier this year, has raised billions in high-yield and asset-backed debt secured against Nvidia GPU inventory. A $5.7 billion junk bond offering backed by data centers leased by Google yielded 6.25 percent earlier this year. AI-related high-yield issuance has grown faster than any other sector in credit markets, Cambridge Associates noted in a recent report.
The risk profile of these instruments is different from traditional bonds. Fixed income is locked in with investment-grade counterparties that guarantee cash flows, often for ten years or more. Cipher’s Amazon leases are structured as triple-network agreements with no flexibility termination clauses, meaning Amazon is committed to paying the lease for the full term, regardless of whether it needs the capacity. This structure is closer to infrastructure finance than speculative grade corporate debt.trash” label is intended.
The broader market context reinforces this trend. UBS credit strategists estimate that the hyperscale sector may need to borrow between $230 billion and $240 billion this year alone. Morgan Stanley and JPMorgan have predicted that the sector could require up to $1.5 trillion in additional debt in the coming years to keep AI development going at its current pace. Data center development is also facing increasing community resistancethis could limit supply and make existing permissioned sites like Cipher’s more valuable.
Cipher’s stock reflected the transformation. The company’s shares rose after it announced its AWS lease and completed its Black Pearl bond, as investors reclassified it from a volatile cryptocurrency to a contract infrastructure host. Whether the junk bond market’s enthusiasm for AI infrastructure is sustained will depend on whether the computing demand for hyperscalers continues to grow at the rate implied by capital expenditures. Orders are still coming in.
