Cipher Digital proposes $850 million convertible notes due 2032
Proceeds are earmarked for capped call trades, further equity investment in the Barber Lake project and the company's data center pipeline
Published
Cipher Digital has proposed a private offering of $850.0 million in convertible senior notes due 2032, carrying a 0.00% coupon. Initial purchasers will have the option to buy up to an additional $150.0 million of notes within 13 days of issuance.
The company plans to use the proceeds to fund capped call transactions, to support additional equity investment in its Barber Lake project, and to fund its data center pipeline. Cipher also expects to enter privately negotiated exchanges with holders of its 1.75% convertible senior notes due 2030, swapping those notes for shares of common stock.
The zero coupon structure lets Cipher raise $850 million, and potentially $1 billion with the additional option, without adding any stated interest expense. That follows the Barber Lake lease expansion reported on September 25, which locked in more than $9 billion of contracted revenue and underpinned the case for further capital commitment. The capped calls and the exchange offers for the 2030 notes are designed to manage dilution, but a convertible issue of this size set against the 1.75% 2030 notes still leaves open the risk of a higher share count once conversion thresholds are reached.
The financing effectively brings forward equity investment in Barber Lake and the wider data center pipeline ahead of first rent payments, which are expected in the fourth quarter of 2026. That ties near term capital structure decisions to a project whose return is still more than a year away.