WhiteFiber prices $270 million convertible notes to fund data center expansion

WhiteFiber Inc. priced $270 million of 5.00% convertible senior notes due 2032, upsizing the offering by $20 million from its initial $250 million plan, to fund expansion of its high-performance computing data centers for generative AI workloads.

The company said it will use about $118.5 million of net proceeds to pay cash consideration for concurrent note exchange transactions, with the remainder going toward leasing or buying land for new data centers, energy service agreements, GPU servers and potential acquisitions.

The notes carry an initial conversion rate of 29.5530 ordinary shares per $1,000 principal, or about $33.84 per share — a 25 percent premium to the Aug. 18 closing price on the Nasdaq Capital Market. Net proceeds are estimated at $259.8 million, or $298.5 million if initial purchasers exercise their option to buy an additional $40 million within a 13-day window. Interest is payable semiannually beginning March 1, 2027, and the notes mature Sept. 1, 2032.

The raise gives WhiteFiber capital to expand its AI infrastructure footprint as hyperscalers and AI startups compete for scarce data center capacity. The company also exchanged $198.15 million of its existing 4.500% notes due 2031 for about $118.5 million in cash and 6.3 million ordinary shares.

Note Exchange Cuts Near-Term Debt

The concurrent note exchange transactions, negotiated with holders of the 4.500% notes due 2031, reduce WhiteFiber's near-term debt load while the new notes extend maturities to 2032. The company expects holders who agreed to exchange will unwind hedge positions and sell the ordinary shares they receive, which could pressure the stock given the volume relative to average daily trading. The existing zero-strike call options tied to the 2031 notes will remain outstanding.

WhiteFiber, which owns high-performance computing data centers and provides cloud services, reported about $60.4 million in total cash and restricted cash as of June 30. The company said it will require additional project financing, such as construction loans, to fully complete its expansion plans. GPU servers for its cloud business will be sourced from suppliers including Nvidia, whose accelerators dominate the AI training market that WhiteFiber's data centers serve.

Investor Impact

The upsize from $250 million to $270 million reflects strong institutional demand for exposure to AI infrastructure growth. WhiteFiber shares fell 10.81 percent in regular trading and dropped 24.27 percent after hours to $20.50 on Aug. 18, as the dilutive note exchange and expected share sales weighed on the stock. The conversion price of $33.84 sits well above the current trading level, implying investors expect meaningful upside as the AI buildout proceeds. The offering's closing on Aug. 21 remains subject to customary conditions and the completion of substantially all of the note exchange transactions.

This article is for informational purposes only and does not constitute investment advice.