Galaxy Digital Completes $3.5 Billion Senior Secured Notes Offering for Texas Data Center Expansion

Completion of $3.5 Billion Senior Secured Notes Offering

Galaxy Helios Data Centers II LLC, an indirect wholly owned subsidiary of Galaxy Digital Inc., closed its private offering of 9.875% Senior Secured Notes on July 28, 2026. The disclosure states that the aggregate principal amount of notes sold in the offering was $3,507,000,000. The notes were offered to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, and to non-U.S. persons outside the United States under Regulation S. Morgan Stanley & Co. LLC served as the representative of the initial purchasers in the transaction.

The notes were issued at a price equal to 99.500% of their principal amount, resulting in a slight discount to par value. This pricing reflects market conditions at the time of the offering and the issuer's credit profile as assessed by institutional investors. The offering follows a purchase agreement dated July 23, 2026, entered into among the issuer, Galaxy Helios II LLC (the guarantor), and Morgan Stanley. The completion of this offering provides Galaxy Digital with substantial capital to advance its data center infrastructure development plans.

Interest Payments and Maturity Structure

The senior secured notes bear interest at a fixed rate of 9.875% per annum, payable semi-annually in arrears on February 1 and August 1 of each year. The filing indicates that the first interest payment date will occur on February 1, 2027. The principal amount of the notes will mature on August 1, 2031, unless earlier redeemed or repurchased in accordance with the indenture terms. The maturity period provides Galaxy Digital with a five-year window to generate returns from the underlying data center infrastructure asset.

The disclosure specifies that the principal amount of the notes will amortize on a semi-annual basis on February 1 and August 1 of each year in amounts set forth in the indenture. Notably, no amortization will be payable prior to the first payment date with respect to the notes, which is to occur at least ten months after the completion of the project. This structured amortization schedule is common for project-based financings, allowing the issuer to establish operational revenue before principal repayment obligations commence. The indenture was entered into on July 28, 2026, among the issuer, the guarantor, and The Bank of New York Mellon, serving as both trustee and collateral agent.

Redemption Options Available to the Issuer

The indenture provides Galaxy Helios Data Centers II LLC with multiple redemption options at various price points and timeframes. Prior to August 1, 2028, the issuer may redeem all or part of the notes at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, plus an applicable make-whole premium. Beginning on August 1, 2028, the issuer may redeem all or part of the notes at redemption prices set forth in the indenture, plus accrued and unpaid interest. These provisions give the issuer flexibility to refinance the debt if market conditions become favorable.

The filing also discloses equity-linked redemption provisions. Prior to August 1, 2028, the issuer may redeem up to 40% of the aggregate principal amount of the notes (which includes additional notes, if any) in an amount not to exceed the proceeds of certain equity offerings at a redemption price of 109.875%, plus accrued and unpaid interest. Additionally, prior to August 1, 2028, during any calendar year, the issuer may redeem up to 10% of the original aggregate principal amount of notes at a price equal to 103% of the principal amount, plus accrued and unpaid interest. These equity-linked provisions incentivize the issuer to pursue equity capital raises as an alternative financing mechanism.

Conditional Redemption Rights and Change of Control Provisions

The indenture includes several conditional redemption rights tied to specific operational or financial events. Upon the occurrence of a Data Center Lease Termination Event, as defined in the indenture, the issuer may redeem all or a part of the notes at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest. This provision protects noteholders by allowing the issuer to address potential revenue disruptions. Additionally, upon or after the Commencement Date, in the event that the issuer's Debt Service Coverage Ratio falls below 1.1:1.0, the issuer may on a single occasion redeem a portion of the notes at 100% of the principal amount plus accrued and unpaid interest, in an amount sufficient to bring the Debt Service Coverage Ratio to no more than 1.1:1.0.

The disclosure states that upon the occurrence of a Change of Control Trigger Event, the issuer will be required to offer to repurchase all outstanding notes at a price equal to 101% of the outstanding principal amount, plus accrued and unpaid interest. This change of control provision protects noteholders in the event of a material ownership or control shift at Galaxy Digital. Similarly, subject to certain conditions and exceptions, the issuer will be required to use proceeds from any Asset Sale to offer to repurchase all outstanding notes on a pro rata basis at 100% of the outstanding principal amount, plus accrued and unpaid interest. The issuer must also offer to apply 100% of any Data Center Lease Termination Fee proceeds to repurchase notes at 100% of the outstanding principal amount plus accrued and unpaid interest.

Covenant Restrictions and Financial Controls

The indenture imposes substantial financial and operational covenants on the issuer and the guarantor, limiting their ability to engage in various actions without consent or rating agency confirmation. The filing states that the indenture restricts the ability of the issuer and guarantor to incur or guarantee additional indebtedness, pay dividends or distributions on capital stock, make certain investments, create or incur liens, and consummate certain asset sales. These covenants are designed to preserve the value and priority of the noteholders' claims and to ensure that the issuer focuses resources on the underlying data center project.

Additional restrictions address operational and structural matters. The disclosure indicates that without receiving a Rating Agency Confirmation, the issuer and guarantor are limited in their ability to hold assets or conduct operations unrelated to the operation of the project, engage in certain transactions with affiliates, merge, consolidate, or transfer substantially all assets, become a general partner in any partnership or joint venture, acquire any subsidiary, or organize any subsidiaries. These covenants are subject to a number of important qualifications and exceptions as set forth in the indenture. The indenture also provides for customary events of default, which would give noteholders remedies if the issuer fails to meet its obligations. The full text of the indenture and the form of note are incorporated by reference and filed as exhibits with the disclosure.

Intended Use of Proceeds for Texas Data Center Project

The disclosure specifies that the issuer intends to use the net proceeds from the offering to finance a portion of the development and construction of two buildings containing eight data halls. The combined facilities will have 400 megawatts of utility capacity and 260 megawatts of critical IT capacity. The project will be built on an approximately 260-acre property in Dickens County, Texas. This geographic location in the Permian Basin region positions Galaxy Digital to serve growing demand for data center infrastructure, particularly in areas with access to power resources and potential operational economies.

In addition to construction financing, the issuer intends to use a portion of the net proceeds to fund debt service reserves. These reserves provide a buffer to ensure timely interest and principal payments during the ramp-up phase of the data center operations, before the facilities reach full operational capacity and revenue generation. The project is designed to serve CoreWeave, Inc., the tenant under a Data Center Lease dated August 8, 2025, as amended. This long-term lease commitment provides the issuer with contracted revenue visibility to support debt service over the life of the notes.

Completion Guarantee and Parental Support Structure

In connection with the offering, Galaxy Digital Holdings LP, the indirect parent of the issuer, provided a customary, uncapped completion guarantee with respect to the project. The disclosure states that this guarantee will require Galaxy LP to provide the landlord with funds as necessary to ensure that each phase of the project required to be delivered to CoreWeave, Inc., the tenant, pursuant to the lease agreement satisfies all conditions applicable to the commencement of rent for each phase. This guarantee applies in the event that the proceeds of the notes and available funds, including prior equity contributions, are insufficient to do so.

The uncapped nature of the completion guarantee represents a significant parental commitment to the project's success. By providing this guarantee, Galaxy Digital Holdings LP ensures that noteholders have recourse to parental assets if the project financing proves inadequate. This structural support reduces execution risk for noteholders and reflects Galaxy Digital's confidence in the project economics and its ability to provide supplemental capital if necessary. The guarantee ties the parent company's credit to the successful delivery of the data center facilities and the commencement of revenue generation.

Project Timeline and Operational Expectations

The filing indicates that amortization of the senior secured notes will not commence until at least ten months after the completion of the project. This deferral of principal repayment provides Galaxy Helios Data Centers II LLC with time to complete construction and reach operational status before facing mandatory principal reductions. The Commencement Date, as defined in the indenture, marks the transition point at which operational financial metrics become relevant to determining the issuer's obligations and available redemption options. This structure is typical for project finance arrangements where asset completion and revenue generation precede debt amortization.

The data center facilities are designed to support modern computational and data storage requirements. The 260 megawatts of critical IT capacity, substantially less than the 400 megawatts of total utility capacity, reflects the difference between total power supply and the amount dedicated to customer-facing computing equipment, accounting for cooling, power distribution, and other supporting infrastructure. The dual-building configuration with eight data halls provides operational flexibility and diversification. The long-term commitment from CoreWeave, Inc., as anchor tenant, provides revenue certainty and demonstrates tenant demand for the facility configuration and location.

Investor Protections and Security Structure

The senior secured notes represent secured obligations of the issuer, with The Bank of New York Mellon serving as both trustee and collateral agent. The disclosure indicates that the notes are secured, meaning noteholders have a documented lien position on the issuer's assets and the underlying project. This security structure provides noteholders with priority claims on the data center facilities, project revenues, and related collateral in the event of default or insolvency. The trustee and collateral agent roles are separated among the same institution, providing both governance oversight and enforcement mechanisms for the noteholder group.

The offering to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S demonstrates that the notes were marketed to sophisticated investors with the capacity to evaluate project risk and credit profile. The restricted nature of the offering limits resales, which typically means notes will be held by investors with longer time horizons and deeper analysis capacity. The 99.500% issue price reflects a slight discount attributable to the project-based financing structure and the execution and operational risks associated with developing and operating large-scale data center infrastructure. Investors may be monitoring the project's construction progress, CoreWeave's operational requirements, and the issuer's ability to achieve projected Debt Service Coverage Ratios.