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Stock Markets March 3, 2026

Applied Digital Plans $2.15 Billion Note Sale, Shares Slide

Company aims to finance 200 MW build-out at Polaris Forge 2 via private placement of senior secured notes

By Leila Farooq APLD
Applied Digital Plans $2.15 Billion Note Sale, Shares Slide
APLD

Applied Digital Corporation (NASDAQ: APLD) said Tuesday that a subsidiary will seek to privately place $2.15 billion of senior secured notes due 2031 with qualified institutional buyers. The announcement coincided with a 6.6% decline in the company's stock. Proceeds are earmarked to fund construction of 200 megawatts of critical IT load at the Polaris Forge 2 AI Factory campus in Harwood, North Dakota, along with related project accounts and fees.

Key Points

  • Applied Digital disclosed a proposed $2.15 billion private placement of senior secured notes due 2031 via its subsidiary APLD ComputeCo 2 LLC, and the announcement coincided with a 6.6% decline in the company's shares - financial markets and corporate credit conditions are directly implicated.
  • Proceeds are designated to develop and construct 200 megawatts of critical IT load at the Polaris Forge 2 AI Factory campus in Harwood, North Dakota - this affects the data center and AI infrastructure sectors.
  • The notes will be guaranteed by existing and future direct and indirect subsidiaries and secured by first-priority liens on substantially all assets of APLD Compute 2 and guarantors, with equity pledges to APLD FAR Holdings LLC - this is material to creditor protections and capital-structure considerations.

Applied Digital Corporation (NASDAQ: APLD) saw its shares drop 6.6% on Tuesday after the company disclosed plans for a sizable debt offering through a unit of the business.

The company said its affiliate APLD ComputeCo 2 LLC intends to offer $2.15 billion of senior secured notes due 2031 in a private placement to qualified institutional buyers. The filing makes clear the planned transaction is subject to market conditions and that there is no assurance as to whether or when the offering will be completed.

Applied Digital stated the net proceeds from the proposed notes would be used to fund the development and construction of 200 megawatts of critical IT load at Polaris Forge 2, the company's AI Factory campus located in Harwood, North Dakota. In addition to direct construction spending, proceeds would be allocated to project accounts, including a debt service reserve account, and to pay related fees and expenses.

The notes will carry guarantees from APLD Compute 2's future and existing direct and indirect subsidiaries, specifically naming APLD FAR-01 HoldCo LLC, APLD FAR-02 HoldCo LLC, and related entities. Security for the notes and guarantees will consist of first-priority liens on substantially all assets of APLD Compute 2 and the guarantors, together with all equity interests of APLD Compute 2 held by its parent, APLD FAR Holdings LLC.

Applied Digital has also committed to provide completion guarantees for the Polaris Forge 2 project. Under those commitments, the parent company will fund APLD Compute 2 as necessary to support timely completion of the build-out.

The company operates as a designer, builder and operator of data centers and offers colocation services targeted at AI, networking and blockchain workloads. The proposed financing is framed as a project-focused, secured borrowing structure intended to support expansion of the firm's AI-focused data center capacity.

Summary of the transaction

  • Issuer: APLD ComputeCo 2 LLC.
  • Size: $2.15 billion in senior secured notes due 2031.
  • Placement: Private offering to qualified institutional buyers; subject to market conditions.

Risks

  • Completion uncertainty - the offering is subject to market conditions and there is no assurance it will be completed, which could affect funding for the Polaris Forge 2 build-out - impacts project finance and construction timelines in the data center sector.
  • Execution risk on construction - while Applied Digital will provide completion guarantees and fund APLD Compute 2 as needed, project delays or cost overruns could strain company resources - relevant to investors and project lenders.
  • Secured financing exposure - the notes will be secured by substantially all assets of APLD Compute 2 and the guarantors; any enforcement actions would involve those pledged assets and equity interests - pertinent to creditors and equity holders.

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