IREN Limited announced it has closed a $3.65 billion investment-grade GPU financing facility to support the delivery of its AI Cloud contract with Microsoft. Highlights: Highest publicly rated investment-grade GPU financing announced $3.65 billion facility at blended cost of debt of 6.00%: $2.10 billion U.S. private placement at a fixed rate equivalent to SOFR+2.13%, $1.55 billion delayed draw term loan (DDTL) at a floating rate of SOFR+2.25%. Funds 96% of $5.81 billion GPU capex for Microsoft contract at all-in financing cost of 3.31%, including customer prepayments.
Anchored by Microsoft?s offtake, the transaction received Fitch and DBRS ratings of A and A(low) respectively, representing the highest publicly rated investment-grade GPU financing announced and the first GPU financing in the U.S. private placement market. The financing comprises a $2.10 billion U.S. private placement at a fixed rate equivalent to SOFR+2.13% and a $1.55 billion delayed draw term loan at a floating rate of SOFR+2.25%, for which IREN has entered into interest rate hedges. IREN achieved a blended cost of debt of 6.00% notwithstanding higher base rates since the initial DDTL underwriting commitment.
The facility is secured against the GPUs and associated contracted cash flows. By combining a U.S. private placement with a DDTL and securing an investment grade rating, IREN was able to access a broader range of investors on attractive terms. Together with customer prepayments, the facility funds $5.59 billion of the $5.81 billion (approximately 96%) of GPU capex under the Microsoft contract at an average financing cost of 3.31% and strengthens IREN?s capital structure as the Company continues to execute on its expansion to 480MW of AI Cloud capacity by the end of 2026. Goldman Sachs and J.P. Morgan served as joint lead managers and arrangers.
The offering included participation from a broad group of global financial institutions, asset managers and insurance investors.
