Cipher Digital said it has signed a second Amazon Web Services lease, this time for its Stingray site in Andrews, Texas, covering 100 gross megawatts, or 70 IT megawatts of critical load.
The company said the lease is tied to about $2.0 billion of contracted revenue, with total contracted lease payments expected to range from about $2.0 billion to $5.7 billion over the full term, including three five-year extension options. The initial rent is targeted to begin on April 1, 2027, for the 10 IT MW network hall, followed by May 1, 2027, for the 60 IT MW data hall.
Cipher said the project carries a development cost of $10.5 million per IT megawatt and is structured with a 3.0% annual rent escalator. It also said the lease is expected to produce roughly 100% NOI margin, with operating expenses described as de minimis under the triple-net structure.
On financing, the company outlined about $810 million of secured debt at the Stingray Compute level. Proceeds are set to fund construction of the 70 IT MW facility through completion, cover debt service reserves and interest during construction, reimburse Cipher Digital for capital expenditures, and pay fees and expenses.
The company said Amazon will cover construction cost overruns above $10.5 million per IT MW, while Amazon.com fully guarantees base rent and operating expenses. Cipher also said the contract is fully pre-leased to AWS with no ability to terminate for convenience after commencement.
In its illustrative post-construction financial summary, Cipher projected Year 1 rent revenue of $2.023 billion, net operating income of $2.033 billion, and cash available after debt service of $972 million. The model showed debt starting at $810 million, rising to $783 million in Year 2 after mandatory amortization, then stepping down to $737 million in Year 3, $686 million in Year 4, $629 million in Year 5, and $19 million by Year 13 before reaching zero thereafter.
The remaining contracted rent payments in the same schedule decline from $1.949 billion in Year 2 to $1.837 billion in Year 3, $1.722 billion in Year 4, $1.604 billion in Year 5, and $41 million in Year 16. As a result of these announcements, the company's shares have moved 4.28% on the market, and are now trading at a price of $23.41. Check out the company's full 8-K submission here.
