Meridian Arc HoldCo LLC has priced a $5.7 billion tranche of 6.25% five-year (non-call two) senior secured bonds at par, according to market sources. The bonds printed on the tight end of 6.25-6.375% guidance via sole bookrunner Morgan Stanley.
The deal marks the largest AI-driven financing completed in the high-yield bond market to date, according to LCD. Street projections for 2026 indicated a ramp-up to about $20 billion in AI-capex and AI-adjusted high-yield issuance, including via utilities, a mark that seems likely to be surpassed.
Meridian’s deal boosted overall weekly high-yield bond issuance to $16.5 billion, the highest total since September 2020.
Meridian Arc HoldCo LLC is a wholly owned subsidiary of Meridian Compute LLC, a JV created by Next Frontier and Fluidstack-owned entities. The company is developing two data centers located on a campus in Sullivan County, Ind. The data centers will deliver 430 MW of critical IT load, and capacity has been 100% leased to Fluidstack over a 15-year base lease term. Additionally, the triple-net lease structure will be guaranteed by Google.
The bond proceeds will fund the acquisition of the property and finance the development and construction of buildings 1 and 2, as well as the substation to be built on the property. The proceeds will also fund debt reserves and pay fees and expenses.
The notes are rated BB at Fitch, with a rating to be determined at S&P Global Ratings. The bonds will include a debt service coverage ratio-based amortization, payable semi-annually beginning on the final sublease commencement date.
Featured image by Quantic69/Getty Images
Learn about our editorial standards.
