Sydney-headquartered Iren Ltd., a specialist in artificial intelligence and high-performance computing data centers, has announced a major fundraising initiative. The company is looking to secure a total of $2 billion through two separate issues of convertible bonds, a move aimed at capitalizing on the explosive global demand for AI infrastructure.
The $2 Billion Bond Offering Details
According to an official statement released on Monday, Iren is offering $1 billion in notes due in 2032 and another $1 billion due in 2033. Sources familiar with the private discussions revealed the proposed coupon rates. The 6.5-year tranche is being marketed with a coupon between 0% and 0.25%, while the 7.5-year issue carries a coupon range of 0.5% to 1%.
Both bond offerings come with a significant conversion premium of 25% to 30%. This means bondholders would have the option to convert their debt into company shares at a price that is 25-30% higher than the current stock price. The news impacted investor sentiment, with Iren's shares dropping 6.4% to $45.38 each in after-hours trading in New York.
Funding the AI Infrastructure Race
Iren operates in the competitive space of "neoclouds"—smaller, agile infrastructure providers that are building capacity specifically for AI and intensive computing workloads. This sector is witnessing massive investments as companies worldwide scramble for computing power. A notable example is the $9.7 billion five-year deal that Microsoft Corp. signed in November to secure computing capacity, highlighting the scale of demand.
The proceeds from Iren's ambitious bond sale are earmarked for several strategic purposes. These include funding capped call transactions, which are often used alongside convertible bonds to reduce potential dilution for existing shareholders. In a parallel move, Iren is also conducting a private share offering and plans to buy back some of its existing convertible bonds that are due in 2029 and 2030.
Banking Giants Lead the Financial Maneuver
The complex financial operation is being managed by some of the world's leading investment banks. Citigroup Inc., Goldman Sachs Group Inc., and JPMorgan Chase & Co. are jointly handling the private share sale. The same trio of banks is also working on the concurrent convertible bond issue.
When approached for comment, a spokesperson for JPMorgan declined to provide details. Representatives for Iren, Citigroup, and Goldman Sachs did not immediately respond to requests for comment. This large-scale fundraising effort underscores the capital-intensive nature of the AI infrastructure race, where companies like Iren are positioning themselves to be key enablers of future technological advancements.
