Galaxy Digital Plans $3.5B Bond Sale for CoreWeave Data Center

What happened

Galaxy Digital priced $3.507 billion of senior secured notes due 2031 at a 9.875% annual interest rate to finance part of the Helios Phase II data center project in Dickens County, Texas. The notes were offered privately to qualified institutional buyers, with the offering expected to close on July 28. The project will feature two buildings with eight data halls on approximately 260 acres, supporting 400 megawatts of utility capacity and 260 megawatts of critical IT capacity. CoreWeave has committed to leasing the full 260 megawatts of critical IT load under a 15-year agreement with $10.4 billion in minimum contracted lease payments. The facility is expected to begin generating rent in the second quarter of 2027 with a 13.7% starting monthly recurring revenue yield on cost. The lease includes annual rent escalators of 3% to 5% depending on inflation. This marks Galaxy Digital's first junk bond sale and follows a $1.4 billion project financing facility secured earlier in 2025 for the initial Helios development.

Why it matters

CoreWeave's 15-year lease commitment to Galaxy Digital's Helios campus demonstrates strong long-term demand for AI cloud infrastructure and data center capacity. The $10.4 billion in contracted payments over 15 years provides revenue visibility for Galaxy Digital while securing critical computing capacity for CoreWeave's AI cloud business. The 9.875% interest rate on the bonds reflects investor appetite for AI infrastructure financing despite junk bond status. For CoreWeave, the lease secures substantial computing capacity to support its AI cloud services as demand for AI workloads continues to grow. The scale of the financing-part of $28 billion raised by AI infrastructure developers through junk bonds this year-underscores the capital intensity of building AI data center capacity and the willingness of debt markets to fund these projects.

Bigger picture

Galaxy Digital's bond sale is part of a broader wave of junk bond issuance in the AI infrastructure sector, with developers raising $28 billion through high-yield debt offerings in 2026 to date. The financing highlights how AI cloud providers like CoreWeave are driving demand for large-scale data center capacity, with long-term lease commitments providing the revenue certainty needed to attract debt financing. The Helios campus has regulatory approval for up to 1.63 gigawatts of power dedicated to AI and high-performance computing, with 800 megawatts already leased to CoreWeave across multiple phases. This scale reflects the enormous power requirements of AI workloads and the infrastructure build-out needed to support the AI industry's growth. The willingness of debt markets to finance these capital-intensive projects at scale indicates confidence in sustained AI infrastructure demand, though the junk bond status and nearly 10% interest rate suggest meaningful execution and market risk.

What to watch

Monitor the successful closing of the bond offering on July 28 and any updates on construction timelines for Helios Phase II, which is expected to begin generating rent in the second quarter of 2027. Watch for CoreWeave's utilization of the leased capacity and any announcements about additional capacity commitments at the Helios campus, which has regulatory approval for up to 1.63 gigawatts total. Track Galaxy Digital's ability to complete construction within budget and on schedule, as delays could affect the 13.7% starting yield. Monitor broader trends in AI infrastructure financing and junk bond issuance in the sector, as continued debt market access will be critical for funding additional data center projects. Pay attention to CoreWeave's own financial performance and growth trajectory, as its ability to meet lease obligations underpins the economics of Galaxy's project.