WhiteFiber Signs $300 Million Morgan Stanley Loan for NC AI Data Center

WhiteFiber has signed a $300 million project loan for its NC-1 AI data center in Madison, North Carolina, led by Morgan Stanley Senior Funding — but not a dollar has been funded. The credit agreement, disclosed in an 8-K filed Tuesday, was signed on Nov. 9 by two indirect subsidiaries, Enovum NC-1 Midco and Enovum NC-1 Bidco, with Morgan Stanley as administrative and collateral agent and lead arranger.

What does the deal actually contain?

The facility splits into a $200 million initial term loan and a $100 million delayed-draw tranche. Both sit at the project level. WhiteFiber Inc. does not guarantee the debt, though the borrower and its parent pledge substantially all their assets, and the parent guarantees the facility.

The initial draw has conditions worth reading closely:

• Readiness and customer acceptance of NC-1's first 40 MW
• A mortgage on the site and other customary conditions
• Funding scheduled within 30 days of closing, with up to two 30-day extensions

The delayed tranche demands more: final completion of the 40 MW first phase and pro forma financial tests. A loan agreement is not a loan. Until Nscale accepts the capacity, WhiteFiber has a promise, not cash.

What will the money cost?

Borrowings pay Term SOFR plus 6.00%, with a 2.00% floor, or the base rate plus 5.00%. Because of the floor, the effective rate cannot fall below 8% a year. The borrower also pays arranger, structuring and upfront fees, plus funding premiums on each draw.

Both tranches mature five years after initial funding and amortize at 2.50% a quarter starting March 31, 2027. Prepayments carry a make-whole premium for the first two years, then step down to 2% and 1%.

Before funding, White Fiber Operating Partnership must deliver an unsecured guarantee covering Phase 1 completion, including cost overruns and specified carry costs. Proceeds can pay Phase 1 construction and punch-list costs, fund reserves, cover expenses and fund permitted distributions to equity holders. Defaults include terminations or material defaults under certain downstream customer arrangements — a clause that puts Nscale's performance inside the lender's protection perimeter.

Who is the tenant, and can they pay?

NC-1's only contracted tenant is Nscale, the AI cloud provider, under a 10-year services agreement worth roughly $865 million including escalators and installation fees, with electricity passed through. One tenant is a concentration risk. Nscale's own demand is under scrutiny elsewhere: Microsoft passed last week on an option to more than double Nscale's Texas contract, and lenders have been demanding higher returns to fund AI infrastructure generally.

WhiteFiber disclosed on Nov. 3 that switchgear commissioning problems had interrupted service and billing in the first 20 MW data hall, pushing full run-rate billing past August. The 10-Q filed alongside the 8-K tells a more settled story: billing for the first 20 MW began Aug. 15, that hall entered service Sept. 23, and all 40 MW is now operational.

Can the balance sheet carry the plan?

Third-quarter revenue was $24.0 million, up from $20.2 million a year earlier. The net loss was $101.4 million, including an $80.8 million induced-conversion charge on convertible notes. WhiteFiber held $138.5 million in cash at Sept. 30 and raised $310 million of 5% convertible notes due 2032 in August.

It has also paid $60 million for two more North Carolina sites, NC-2 and NC-3, targeting first capacity in late 2027. The company said its existing capital may not cover both that pipeline and near-term debt maturities without new funding. The Morgan Stanley facility buys time for NC-1, but the build-out beyond it still depends on money WhiteFiber has not yet raised.