Applied Digital

We believe data centers are a key component of thriving communities, providing essential support for the technologies that keep businesses, governments, and homes running smoothly, while enabling further advancement and economic growth. Since 2017, CIM has been actively investing in the data center space.

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Through our ongoing involvement in the industry, we identified an opportunity to provide financing for a company we recognized as a strong performer serving an important niche. In June 2024, we closed on a $125 million bridge loan to Applied Digital (NASDAQ: APLD).

Founded in 2019, Applied Digital designs, develops and operates next-generation digital infrastructure across North America, providing solutions for the rapidly growing high-performance computing industry. The company was seeking a loan to fund capital expenditures and equipment purchases in connection with the development of a 100-plus-megawatt hyperscale data center.

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Accessing our experience in infrastructure credit and data center development, our team structured a loan to mitigate CIM’s downside risk and capture upside potential, while providing swift capital delivery to the borrower.

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• Collateral & Guarantee: The loan was collateralized by three assets in North Dakota: two income-generating blockchain data centers, which Applied Digital leases to bitcoin mining companies, as well as the high-performance computing data center in development. The loan was also secured by a parent company guarantee, offering an additional measure of downside protection to CIM’s loan.

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• Value Creation Opportunity: As part of the loan agreement, our team negotiated warrants in Applied Digital’s stock that provided equity upside in Applied Digital, catalyzed by the company’s business plan and leasing execution.

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• Early Payoff Incentive: We structured the loan with a three-year term and a step-up in early repayment requirements after six months to incentivize an early payoff. Due to the progress it made toward its development business plan and broader market AI trends, Applied Digital was able to access capital markets to pay off CIM’s loan within six months.

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Our team’s deep understanding of the data center industry and experience in infrastructure credit structuring were pivotal factors in this successful transaction. This knowledge enabled us to mitigate risk and generate meaningful value while delivering the needed bridge financing to the borrower.