Initiating Coverage of HY AI Data Centers

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Initiating Coverage of HY AI Data Centers

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AI Data Centers

Initial Opinion - Credit

Starting HY-rated AI data center coverage with 8 issuers 17 July 2026

Since Oct. ‘25, there have been 16 high yield (HY)-rated secured bonds issued by AI data High Yield Credit

center operators totaling $36.4Bn. The bond issues resemble success-based five-year United States

project finance loans -- each are issued by a discrete set of AI data center deployments Technology

of which the funded capacity is fully pre-leased on a take-or-pay basis. We initiate

coverage of the eight HY AI data center issuers that are public-company subsidiaries. Table of Contents

Positive on sector outlook, leases cover debt WULF Compute (bond: WULF) 6

Cipher Compute (bond: CIFR) 8

We have an overall positive view on AI data centers, which provide the powered shells

Black Pearl Compute (bond: BLKPRL) 10

for high-performance compute deployments, due to the strong demand environment,

which we believe shows no signs of abating, and constrained supply. Further, we believe Stingray Compute (bond: STNGRY) 12

limitations related to power availability and zoning and other local restrictions that APLD ComputeCo (bond: APLD) 14

hamper new development enhance the value of powered deployments that are APLD ComputeCo 2 (bond: PFORGE) 16

operational or nearing construction and energization completion. We are also positive on APLD ComputeCo 3 (bond: ELNFOR) 18

the lease and bond structures - for all eight of the debt issuers we are initiating on, the Core Scientific Finance I (bond: CORZ) 21

debt is sized so it can be repaid within the take-or-pay lease term, which we believe

mitigates refinancing risk for the five-year bonds. Among factors to consider in valuing

Ana Goshko