Applied Digital seeks $1.59bn notes for Polaris Forge 1 build

Applied Digital Corporation has announced a proposed $1.59 billion senior secured notes offering through its subsidiary APLD ComputeCo 3 LLC, with proceeds earmarked for the construction of ELN-04, the fourth building at Polaris Forge 1 — the company's AI Factory campus in Ellendale, North Dakota. The notes are due 2031 and will be offered privately to qualified institutional buyers under Rule 144A and Regulation S.

The new building will add 150 megawatts of critical IT load to the Polaris Forge 1 campus. Alongside funding construction, proceeds will be used to repay an existing Goldman Sachs bridge loan facility, fund debt service reserves, and cover transaction expenses. Applied Digital will provide a completion guarantee, committing to fund the subsidiary as needed to ensure ELN-04 is delivered on schedule.

The deal

The notes will be secured by first-priority liens over substantially all assets of APLD ComputeCo 3 and its guarantor subsidiaries — including APLD ELN-04 HoldCo LLC, APLD ELN-04 LLC, and APLD ELN-04 LandCo LLC — as well as the equity interests in APLD ComputeCo 3 held by its direct parent, APLD HPC Holdings 2 LLC. The structure is a project-finance model, ring-fencing the ELN-04 asset and its associated cash flows within a dedicated subsidiary stack.

The offering is subject to market conditions; no assurance was given on timing or final terms. The notes have not been registered under the Securities Act and are not available to retail investors in the United States absent an applicable exemption.

Market context

The $1.59 billion raise reflects the capital intensity now characteristic of hyperscale AI data centre development. At 150 MW per building, ELN-04 is sized at the upper end of what enterprise colocation providers are deploying in a single phase, with power density per rack continuing to climb as GPU-accelerated workloads displace traditional compute. Applied Digital's waterless cooling approach — cited in its company description as proprietary — is a meaningful differentiator in water-stressed regions such as the Upper Midwest, though the company has not published independent efficiency benchmarks for the Polaris Forge campus.

The broader AI infrastructure market is in a capital-raising cycle, with debt markets increasingly willing to extend project-finance structures to data centre operators backed by long-term lease agreements with creditworthy anchor tenants. Applied Digital did not name the customer or customers committed to the ELN-04 capacity, which is a notable gap for investors evaluating credit risk on the notes.

Competing developers — including hyperscaler-owned campuses and pure-play colocation operators — are also expanding aggressively in power-advantaged markets across the US Midwest and Southeast. Debt financing at the subsidiary level, secured against specific assets, is a model that allows operators to preserve corporate balance-sheet flexibility while locking in construction funding; it has become a template across the sector over the past 18 months.

Applied Digital, founded in 2021, was recognised as Best Data Centre in the Americas 2025 by Datacloud. The company's Polaris Forge model is positioned as a vehicle for economic development in underserved communities, a framing that has helped it secure sites in rural North Dakota. Investors and analysts will be watching for disclosure of the ELN-04 anchor tenant, construction timeline, and any covenants tied to the Goldman Sachs bridge repayment as conditions of the notes close.