Applied Digital Closes Cloud Spinoff, Secures $550 Million Credit Line
The data-center operator completed the ChronoScale separation and arranged a new revolving facility as it narrows its capital plan to a single Polaris Forge building.
Applied Digital (APLD), the data-center infrastructure company, completed the separation of its cloud business into ChronoScale and secured a $550 million revolving credit facility as it refocused its balance sheet on hyperscale colocation.
The moves mark a strategic narrowing. Applied Digital had been pursuing a $2.15 billion notes offering to fund 200 megawatts of capacity at Polaris Forge 2, but the company instead announced a proposed $1.59 billion senior secured notes offering due 2031 to fund 150 megawatts of critical IT load at Building 4 of Polaris Forge 1, a smaller and more targeted capital raise. The shift signals a phased approach to financing across campuses rather than a simultaneous buildout of both sites.
The ChronoScale separation, which advanced from a non-binding term sheet disclosed in December 2025 to a closed transaction, saw the cloud unit begin trading on Nasdaq under the ticker CHRN on May 5, 2026. Applied Digital retained roughly 97 percent ownership and invested $15.75 million in cash in the newly independent entity. The spun-out business had generated twelve-month revenue of approximately $75.2 million as of August 31, 2025, a figure now removed from Applied Digital's consolidated results.
On the financing side, the new revolving credit facility of up to $550 million — comprising $350 million in committed capacity and a $200 million accordion — was arranged by Goldman Sachs and matures May 29, 2029, at SOFR plus 225 basis points. The facility had no precedent in prior quarters and provides the company with flexible liquidity as it advances construction at Polaris Forge 1.
Applied Digital also disclosed a memorandum of understanding with CoreWeave, dated June 5, 2026, under which the CoreWeave lease for Building 3 at Polaris Forge 1 would be assigned to a CoreWeave subsidiary if that subsidiary achieves an investment-grade credit rating. The arrangement had not appeared in earlier filings.
The company had previously completed a development loan facility with Macquarie Group in December 2025, drawing an initial $100 million to fund pre-lease development costs for new data center campuses, including advanced-stage negotiations with an investment-grade hyperscaler. That facility has not been referenced in subsequent disclosures.
Taken together, the quarter's activity shows Applied Digital consolidating around its core colocation business, paring the size of its bond offering, and layering in bank financing — a combination that tightens its capital structure as Polaris Forge 1 moves toward full buildout.