Cipher Digital Doubles Down On AI With $810M Note Offering — Analyst Says Lease Terms Hit ‘High End’

• Cipher Digital plans to offer $810 million in senior secured notes through subsidiary Stingray Compute to fund a new data center.
• Net proceeds will finance the remaining cost of the Stingray Facility, reimburse Cipher about $63.6 million for prior equity contributions, and fund debt service reserves.
• The notes will be fully guaranteed by Cipher Stingray and secured by first-priority liens on the issuer's and guarantor's assets.

Cipher Digital (CIFR), a former Bitcoin (BTC) miner, announced on Monday that it plans to raise $810 million through senior secured notes issued by subsidiary Stingray Compute LLC to fund a new data center.

The notes will be due in 2031 and sold privately to qualified institutional buyers under Rule 144A and to non-US buyers under Regulation S. Those are SEC registration exemptions that let companies sell securities to large institutional and overseas investors without registering them with the regulator.

The company said net proceeds will finance the remaining cost of the Stingray Facility data center. Cipher also intends to reimburse itself about $63.6 million for prior equity contributions to Cipher Stingray and to fund debt service reserves, according to the release.

The notes will be fully guaranteed by Cipher Stingray and secured by first-priority liens on substantially all of the issuer's and guarantor's assets. Cipher will also provide a customary completion guarantee for the Stingray Facility, funding the issuer as needed to ensure timely completion if note proceeds fall short, the company said. The offering remains subject to market and other conditions, and Cipher said there is no assurance as to whether or when it will be completed.

Cipher’s stock was up over 6% during early-morning trade. On Stocktwits, the retail sentiment around CIFR remained in the ‘bullish’ zone, while chatter around it stayed in the ‘normal’ levels over the past day.

Betting Big On AI Infrastructure

The announcement marks the latest step in Cipher's shift from purely Bitcoin mining into artificial intelligence (AI) and high-performance computing (HPC) infrastructure. The Stingray Facility joins a growing portfolio that includes HPC data centers at Barber Lake and Black Pearl, alongside the company's legacy Texas mining sites.

Cipher develops and operates industrial-scale data centers built for HPC workloads. The company has said it aims to become a leading HPC development platform built for hyperscale, partnering with premier tenants to meet demand for industrial-scale data center capacity.

Analyst Flags Stronger-Than-Expected Lease Terms

VanEck's Matthew Sigel weighed in on the disclosure, pointing to the terms of the 70-megawatt Stingray lease that Cipher announced last month. In a post on X on Monday, Sigel noted the tenant is Amazon Web Services (AWS) under a 15-year triple-net lease, with rent commencement targeted for April 2027.

Sigel said the deal implies roughly $1.9 billion in net operating income per megawatt — "the high end of what we've seen" — and added that his firm had been modeling lower margins, estimating the triple-net structure adds about $1 per share. 

A transaction overview Sigel shared put contracted lease payments at roughly $2.0 billion to $5.7 billion, with a near-100% NOI margin and a development cost of about $10.5 million per megawatt.

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