Why did Cipher Digital (CIFR) price US$850 million of convertible notes?

Sonal Goyal

28 October 2026 04:59 PM AEDT

Why did Cipher Digital (CIFR) price US$850 million of convertible notes?

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Key Highlights

Cipher Digital priced a US$850.0 million private offering of 0.00% convertible senior notes due 1 November 2032, with an initial conversion price of about US$15.31 per share.
A Barber Lake Lease amendment adds about US$5.2 billion of contracted rent and extends the base lease term to 20 years.
The company reported 907 MW of operating and contracted capacity and contracted Revenue of US$16.6 billion as of 30 September 2026.

The convertible offering

Cipher Digital Inc. (NASDAQ:CIFR), formerly Cipher Mining Inc., announced on 14 October 2026 the pricing of a US$850.0 million private offering of 0.00% convertible senior notes due 1 November 2032. The notes carry no regular interest, and the initial purchasers hold a 13-day option to buy up to US$150.0 million more.

The initial conversion price is about US$15.31 per share. Net proceeds were expected to be about US$835.1 million. About US$89.7 million was earmarked for capped call transactions with a cap price of US$28.35, and the remainder for the Barber Lake project, high-performance computing (HPC) build-out, site pipeline expansion and general corporate purposes.

Exchange of 2030 notes and settlement change

Cipher also expected to exchange about US$165.9 million principal of its 1.75% convertible notes due 2030 for roughly 40.7 million shares of common stock, in privately negotiated transactions. On 16 October, it gave notice that the default settlement method for its 2030 and 2031 convertible issues is now physical settlement.

The capped call cost equates to about 10.6 per cent of the principal amount. The new notes carry no regular interest, and holders have a put on 1 November 2030.

The company set out the Barber Lake lease expansion in the same investor materials. An amendment with a leading AI laboratory adds about US$5.2 billion of contracted rent, takes total contracted revenue at that site above US$9 billion and extends the base lease term to 20 years.

Portfolio and the second quarter

The company reported 907 MW of operating and contracted capacity, of which 700 MW is contracted HPC capacity, with contracted revenue of US$16.6 billion and a weighted average lease term of 17.3 years. These were given as of 30 September 2026 in the investor deck. Rent began at Black Pearl in August.

On 4 August 2026, its Business update for the second quarter showed Bitcoin Mining revenue of about US$24.8 million, down from US$34.8 million in the first quarter. The net loss was about US$267.5 million, largely from a US$150.5 million change in the Fair Value of a Warrant liability, and adjusted EBITDA was about minus US$30.0 million.

Cash was about US$832 million at 30 June, and total Debt was about US$6.0 billion, of which secured debt was about US$4.5 billion.

What to watch

Cipher has scheduled its third-quarter business update call, with 2 November 2026 listed as the next Earnings date. Points to watch include any exercise of the additional-notes option, the share issuance from the note exchange, and progress in delivering Barber Lake and Stingray.

Other measures include the Equity commitment for Barber Lake of roughly US$750 million, the use of cash given the debt load, and evidence that contracted revenue converts into rent on schedule. Because the figures above mix company projections with reported results, readers should check each against the underlying filings.

FAQs

Q: What are the terms of Cipher Digital's convertible notes?

A: The US$850.0 million 0.00% convertible senior notes are due 1 November 2032, with an initial conversion price of about US$15.31 per share. Initial purchasers hold a 13-day option for up to US$150.0 million more.

Q: How will Cipher Digital use the proceeds?

A: Net proceeds were expected to be about US$835.1 million. About US$89.7 million funds capped call transactions, and the remainder goes to the Barber Lake project, HPC build-out, site pipeline expansion and general corporate purposes.

Q: What did the Barber Lake lease amendment add?

A: The amendment with a leading AI laboratory adds about US$5.2 billion of contracted rent. Total contracted revenue at the site rises above US$9 billion and the base lease term extends to 20 years.

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