Galaxy Digital priced $3.507 billion in senior secured notes on July 23 to help fund new construction at a data center campus it is building for CoreWeave in Dickens County, Texas, according to a filing with the Securities and Exchange Commission. The notes carry a 9.875% coupon, which works out to roughly $346.3 million a year in interest payments — a cost Galaxy is counting on rent from a single tenant to cover.
The deal is one of the largest project-level debt financings yet in the AI data center construction boom, and it shows how developers are turning to high-yield bond markets, not just bank loans, to pay for the buildings needed to house AI computing hardware. Texas has become a hub for this kind of construction, with other large campuses in the state reaching full lease-up even as new projects break ground.
The notes were sold by Galaxy Helios Data Centers II LLC, an indirect subsidiary of Galaxy Digital Inc. (Nasdaq: GLXY), and mature Aug. 1, 2031, the company disclosed in its 8-K filing. Interest is payable twice a year, on Feb. 1 and Aug. 1, starting in 2027. Principal amortization, equal to 4% of the original balance annually, begins at least ten months after construction wraps up.
Proceeds will help build two additional buildings with eight data halls, adding 400 megawatts of utility power and 260 megawatts of critical IT capacity to the Helios campus, according to the filing and an accompanying investor disclosure Galaxy filed the same week. The new buildings sit within Galaxy’s broader Helios site, which spans roughly 1,000 acres north of the town of Dickens, about an hour’s drive from Lubbock. Galaxy has been developing the property since it acquired a bitcoin-mining operation there from Argo Blockchain in December 2022 and began converting it to AI-focused data center use.
Galaxy said it completed the first phase of Helios on schedule, delivering 133 megawatts of critical IT load to CoreWeave (Nasdaq: CRWV), according to a company press release. CoreWeave has now committed to lease the entire 800 megawatts of critical IT capacity Galaxy has approved at Helios, under a 15-year base lease with two five-year extension options, Galaxy’s SEC disclosure shows. The lease is structured as “near triple net,” meaning CoreWeave — not Galaxy — pays utilities, taxes, insurance, maintenance and ordinary repairs. Galaxy’s filing puts total minimum contracted lease payments at $10.4 billion over the base term, with rent escalating 3% to 5% annually.
Dickens County, a rural county with fewer than 2,000 residents, has approved tax incentives tied to the buildout, including an $18.5 million payment-in-lieu-of-taxes arrangement and $2 million for local housing, according to the Texas Spur, a local outlet covering the county. County Judge Kevin Brendle said the agreement would bring tax relief to property owners and help address housing availability. Building permits filed with the county separately list an estimated construction cost near $900 million for one new structure and about $1.3 billion each for two others, Lubbock news outlet EverythingLubbock.com reported.
What it means
The $346.3 million annual interest figure is confirmed math from Galaxy’s own SEC filing — the coupon cost of the debt itself, not a cost overrun. Galaxy’s investor materials project the completed Phase II buildings will produce a roughly 90% net operating income margin once rent begins, with a starting yield on cost of 13.7%. That means Galaxy is betting CoreWeave’s rent, not equity, will service most of the debt. The near-10% coupon reflects a below-investment-grade rating on project debt backed by a single tenant, underscoring how much of the AI data center buildout rests on CoreWeave’s compute demand keeping pace with the capacity being built for it.
This project is not the same one RealtyWire previously reported on in Reeves County, where LandBridge and PowerBridge are advancing a separate 2-gigawatt campus roughly 350 miles to the west, near the Permian Basin’s Waha natural gas hub. The two developments involve different landowners, different power strategies and different Texas regions, illustrating how many large, separately financed AI data center projects are moving forward across the state at once.
What to watch
The notes offering was expected to close July 28. Phase II data halls are targeted for delivery with rent commencement in the second quarter of 2027. Galaxy has said it is studying additional expansion at Helios beyond the currently approved 800 megawatts, and any further ERCOT interconnection approvals would signal how much more capacity the site could eventually support. CoreWeave’s own SEC filings, expected in coming quarters, should show whether the company is booking the lease commitments Galaxy has described, and county records will show whether construction proceeds on the timeline underlying the tax abatement.
