Unafraid of GEO Group Inc. risk! Applied Digital (APLD.US) successfully issued $2.15 billion in bonds, providing computing power for Oracle Corporation.

Applied Digital (APLD.US) financed the construction of additional computing capacity for Oracle Corporation (ORCL.US) by issuing $2.15 billion in junk bonds. This indicates that despite increasing uncertainty, there is still strong demand in the market for AI-related debt. The bond issuance was priced at the lower end of the recommended yield range, around 7.23%, and was led by Goldman Sachs Group, Inc. This transaction was one of the few debt offerings priced on Tuesday. Due to heightened political tensions after the U.S. attacked Iran and increased risks of conflict in the Middle East, most borrowers chose to wait. Applied Digital stated that the proceeds from this issuance will be used to fund the construction of a 200-megawatt data center in North Dakota, which has been leased to Oracle Corporation. This deal highlights how junk-rated companies contribute to the large-scale capital expenditures needed for expanding the computing capabilities of cloud giants. Investor interest in such debt has been strong, as seen in a recent issuance supported by asset management company Tract Capital, as well as financings for crypto miners Cipher Mining Inc. and TeraWulf Inc. In November, Applied Digital paid a higher yield to ensure investor support for a $2.35 billion issuance that funded a facility with junk-rated company CoreWeave Inc. as the main tenant. According to data, the bond was issued at 97 cents at the timeon par with the second-largest discount issuance in 2025. However, Trace data shows that the bond has since risen to close to 105 cents. In October, Applied Digital stated that the North Dakota data center project is expected to generate $5 billion in contract revenue over a lease term of about 15 years.