TeraWulf (NASDAQ: WULF) and Fluidstack plan to offer $1.275 billion in senior secured notes to fund the development of high-performance computing infrastructure.
The duo are making the offering under Flash Compute, a subsidiary of a joint venture that TeraWulf (NASDAQ: WULF) and Fluidstack created earlier this year. TeraWulf holds a 50.1% interest through Big Country Wulf, and Fluidstack owns the remaining 49.9% through its subsidiary Fluidstack CS I.
The notes are due in 2030 and include a 50% excess cash flow offer and a mandatory debt service schedule. According to the offering documents, the notes are secured by a building with a value of $1.36 billion, and the model assumes an 8.0% coupon paid on a semiannual basis.
Mandatory amortization of the debt is scheduled to begin upon the commencement of the lease. The initial mandatory amortization is projected at $19 million in 2026, increasing to $85 million by 2031.
The debt summary indicates that total debt will decrease from $1.275 billion to $700 million over the five year period. This reduction includes a cash collateral release of $75 million from a letter of credit.
Google (NASDAQ: GOOG) will backstop $1.8 billion of the lease obligations tied to the project financing, and the agreement also provides Google with warrants for approximately 41 million WULF shares. This represents about 8% of the pro forma equity in the company.
TeraWulf and Fluidstack formed the joint venture initially on August 14, 2025 for a 200 MW AI at TeraWulf’s Lake Mariner campus. The agreements included two 10-year colocation contracts with AI cloud platform Fluidstack.
On October 28, the deal expanded to include 168 MW, bringing the deal’s total contracted revenue to $9.5 billion. The project timeline expects phase one to be online in the first half of 2026.
Operating expenses for the facility are estimated at $42.7 million in the first year. These costs include property taxes, insurance, and operational expenses. The model projects these costs to escalate at a rate of 3% per year.
Net operating income is projected to be $55 million in 2026. This figure is expected to grow to $251 million by 2031. The net operating income margin is forecasted to remain steady at 84% throughout the period.
The termination fee (backstop) by Google assumes an early termination scenario. This fee starts at $1.3 billion and amortizes down to $742 million by 2031. Google must assume the lease if there is an insolvency or payment default.
The document states that Google must assume the lease unless the first 6 years of the term have passed. It also excludes cases where the facilities are at less than 50% GPU capacity. The market maker arm of Citadel recently disclosed a 5.4% passive stake in TeraWulf as of December 1.
