Applied Digital (APLD) expands revolver, $2B preferred capacity

Applied Digital (APLD) said Friday that committed capacity under its secured revolving credit facility had risen to $430.0 million. The AI data-center operator also expanded a separate preferred-equity program to $2.0 billion, while its shares fell 4.18 per cent to $39.16.

The SEC filing index and new Form 8-K give a balance-sheet view of how AI infrastructure companies are paying for build-outs. Applied Digital is pairing a bank revolver with a convertible preferred facility, a setup that adds runway without making the capital structure simpler. Extra headroom can fund data-center construction, power equipment and customer commitments. Common shareholders, though, sit below more senior or preferred claims if those projects take longer to produce cash.

Under the filing, the revolver now has $430.0 million of committed capacity and can rise to $550.0 million if lenders add another $120.0 million of commitments. The facility matures on May 28, 2029. Loans based on Term SOFR carry an applicable margin of 2.25 per cent, according to the SEC filing. First National Bank of Omaha is administrative and collateral agent, and Goldman Sachs Lending Partners LLC is among the lender parties. That roster places conventional bank balance sheets near the center of the company’s AI build-out.

Applied Digital told investors in a June 8 press release that the revolver could support as much as $550 million of strategic growth financing. Friday’s filing filled in the committed piece and paired it with a higher ceiling on the Series G Convertible Preferred Stock purchase agreement, which rose from $1.59 billion to $2.0 billion. The timing is tight: only weeks after the original facility was announced, Applied Digital is asking lenders and preferred investors to scale together instead of one after another.

Borrowing against SOFR is useful, but it is not static funding. Interest cost moves with the benchmark rate before the 2.25 per cent margin is added. Preferred capital gives management another financing valve and may help the company avoid an immediate common-stock sale at the market price. It also adds a security with its own return terms above the ordinary shares. For a sector racing to add power, servers and customer capacity, the disclosure shows balance-sheet flexibility being bought with more complex financing.

In the company’s statement on the facility, chief financial officer Saidal Mohmand cast the lender backing as a sign of the opportunity ahead.

“The strong support we received from this syndicate of leading financial institutions underscores the scale of the opportunity before us.”

Saidal Mohmand, CFO, Applied Digital

For shareholders, the trade-off is plain. More liquidity can help fund construction, equipment and growth commitments without an immediate return to the equity market. The same move adds more senior claims ahead of the common stock, while investors across AI-linked names test how much capex, leverage and preferred capital the theme can absorb before valuation discipline hardens.

Friday’s disclosure read as more than a routine facility amendment. It showed an AI infrastructure operator widening its financing runway soon after securing the first version of the revolver. With a May 2029 maturity on the loan and a $2.0 billion preferred ceiling in place, Applied Digital has bought more time and flexibility. The next debate is whether that capital will earn enough to justify the stack behind it.