Cipher Digital Inc. (Nasdaq: CIFR) priced a private offering of $850.0 million in 0.00% convertible senior notes due 2032 on Oct. 14, 2026, according to a pricing release filed with the SEC as an exhibit to a Form 8-K. Cipher said it intends to use part of the proceeds to fund additional equity investment in its Barber Lake data center in Colorado City, Texas, where the company announced on Sept. 25 that it had amended its lease with Fluidstack and secured a binding commitment from what it called "a leading AI lab" to lease the facility for an additional 10 years after the Fluidstack lease concludes.

The lease amendment sets how long Barber Lake is contracted and how construction cost overruns are shared; the notes offering is how Cipher says it will pay for more of the project.

The Barber Lake lease amendment

In a Sept. 25 release filed as Exhibit 99.1 to a Form 8-K, Cipher said it had executed an amendment to its existing lease with Fluidstack that is coupled with the AI lab's commitment. The additional 10-year term will be governed by a separate lease with economic terms the company described as substantially consistent with the Fluidstack lease.

Cipher said the agreements extend the facility's contracted lease duration from 10 years to 20 and increase total contracted revenue at the site from $3.8 billion to more than $9 billion. The additional term is expected to generate about $5.2 billion of incremental contracted revenue, the company said.

The amendment also sets a phased delivery schedule tied to change orders and evolving tenant requirements. Individual data halls are expected to be delivered from the fourth quarter of 2026 through the first quarter of 2027, with rent commencing for each hall as it is delivered and the first rent commencement expected in the fourth quarter of 2026.

Cipher, Fluidstack and the AI lab also set up a cost reimbursement framework. Under it, Cipher bears the first $359.3 million of costs above the initial budgeted amount under the lease. For costs beyond that, the tenant will reimburse Cipher for 50% over the aggregate 20-year term, payable as additional rent calculated to give Cipher a contracted rate of return on the reimbursed amounts, according to the release.

"Extending Barber Lake’s contracted life from 10 to 20 years and adding approximately $5.2 billion of contracted revenue reflects the enduring value of the infrastructure we're building," Tyler Page, Cipher's chief executive officer, said in the company's announcement.

The convertible notes

Cipher furnished an investor presentation for the offering on Oct. 13 and priced the notes the next day. According to the pricing release, the notes will not bear regular interest, mature on Nov. 1, 2032, and were offered to persons reasonably believed to be qualified institutional buyers under Rule 144A, with settlement scheduled for Oct. 16, 2026, subject to customary closing conditions. Cipher granted the initial purchasers a 13-day option to buy up to an additional $150.0 million in principal.

The initial conversion rate is 65.3211 shares per $1,000 of principal, which the company said represents an initial conversion price of about $15.31 per share, a premium of about 35.0% over Cipher's last reported sale price of $11.34 on Oct. 13. Cipher estimated net proceeds of about $835.1 million, or about $982.5 million if the purchasers' option is exercised in full, before offering expenses. It said it intends to use about $89.7 million to fund capped call transactions, with an initial cap price of $28.35 per share, and the remainder for the Barber Lake equity investment, the build-out of its high-performance computing (HPC) strategy across its near-term pipeline, expansion of its pipeline of development sites, and general corporate purposes.

Alongside the offering, Cipher said it expects to exchange about $165.9 million principal amount of its 1.75% convertible senior notes due 2030 for about 40.7 million shares of common stock in privately negotiated transactions. The new notes are redeemable at Cipher's option on or after Nov. 5, 2029, but only if the stock's last reported sale price exceeds 130% of the conversion price for a specified period and other conditions are met.

The investor presentation, titled "Project Compass" and filed with an Oct. 13 Form 8-K under Regulation FD, names Morgan Stanley and Goldman Sachs as bookrunners and lists Page and Chief Financial Officer Gregory Mumford as presenters. It describes about $750 million in additional project equity to support the Barber Lake lease extension and additional rentalization, based on estimated cost to complete as of Oct. 6.

Cipher's wider portfolio

The presentation reports, as of Sept. 30, 2026, 907 MW of operating and contracted capacity, a figure based on gross MW for executed HPC leases and currently operating bitcoin self-mining capacity, including three data center campus leases with hyperscalers. It lists 700 MW of contracted gross HPC capacity, $16.6 billion of contracted revenue and a weighted average lease term of 17.3 years. At its Black Pearl site, the company said, first data center capacity was delivered in August, two months early, and rent has commenced.

The presentation also describes about 3.4 GW of near-term grid capacity energizing across 2027 to 2030 and beyond, gross pipeline capacity it labels "subject to ERCOT batch process." That pipeline includes Colchis, a 1 GW Texas site that Cipher says has received conditional Batch Zero base load status as part of ERCOT's audit process, and a new Texas site called Apollo, on which Cipher acquired an option for up to 900 MW and which it says has been submitted as a studied load in Batch Zero.

What Happens Next

At Barber Lake, the amended schedule calls for the first rent commencement in the fourth quarter of 2026, with the remaining data halls delivered through the first quarter of 2027. The AI lab's term begins after the Fluidstack lease concludes, under a separate lease.

The initial purchasers' option on the additional $150.0 million of notes runs for 13 days from the offering's terms, and noteholders may require Cipher to repurchase their notes for cash on Nov. 1, 2030, according to the pricing release.

For Colchis and Apollo, the presentation ties energization to ERCOT's batch study process, in which Colchis holds conditional status and Apollo has been submitted as a studied load.

Sources