Cipher’s AI Unit Black Pearl Draws $13B Order for $2B Junk Bond Sale
Cipher Mining’s AI unit Black Pearl Compute priced a $2 billion five-year high-yield (junk) bond at a 6.125% yield after receiving subscription interest of about $13 billion. Proceeds will fund construction of a Texas data centre leased to Amazon Web Services (AWS) under a deal signed in November with at least a 15-year term and estimated contracted revenue of $5.5 billion; funds will also repay roughly $232.5 million of prior equity into Black Pearl and other corporate needs. The bond issuance is secured by first-priority liens covering nearly all of the issuer’s and guarantor’s assets. Cipher has previously announced partnerships with FluidStack and Google as it diversifies from bitcoin mining into high-performance computing. Despite heavy demand for the bond, Cipher’s stock fell 12.36% to $14.25 amid broader crypto market selling. Cipher is the fourth-largest publicly traded bitcoin miner by market cap.
Neutral
The news is mixed for crypto markets. Positive elements: strong investor demand (≈$13B) for a $2B junk bond suggests confidence among credit investors in Black Pearl’s AWS-backed cash flows and in Cipher’s diversification into AI/high-performance computing — a real-economy revenue stream that can reduce reliance on volatile bitcoin revenue. The first-priority lien and a long-term AWS lease materially de-risk the asset financing relative to unsecured crypto debt. Negative elements: the bond is high-yield (junk) and proceeds partly repay internal funding, indicating non-investment-grade credit risk. Cipher’s stock dropped ~12% on the same day, reflecting broader crypto sell-off and investor concern about leverage or execution risk. For traders: expect limited direct price support for BTC from this corporate financing; however, the deal may be viewed as constructive for Cipher’s credit profile and long-term business diversification. Short-term: likely neutral-to-slightly bearish for Cipher equity (continued volatility) and neutral for the wider crypto market. Long-term: mildly positive for crypto infrastructure equities that demonstrate non-crypto revenue and secured financing, as such moves can attract broader capital and lower sector risk premia. Historical parallels: crypto firms issuing secured, enterprise-backed bonds (or partnering with cloud providers) tend to calm credit concerns but do not immediately reverse crypto-wide sell-offs—equity recovery often follows successful project execution and stable revenue recognition.