TL;DR · 30-second read
The Short Version
WhiteFiber, a company that builds data centers for artificial intelligence, has lined up a $300 million loan from a group led by Morgan Stanley for its campus in Madison, North Carolina.
The catch is that the lenders will not hand over a dollar until the building is finished and its paying customer formally signs off on the first section. That section draws about as much electricity as tens of thousands of homes.
Lenders backing these buildings are betting more on the tenant paying rent than on the building itself.
Two indirect subsidiaries of WhiteFiber, Inc. (Nasdaq: WYFI) signed a $300 million term loan credit agreement on November 9, 2026. Morgan Stanley Senior Funding, Inc. is administrative agent, collateral agent, lead arranger and lead bookrunner for a lender consortium. The deal finances Phase 1 of the company’s NC-1 AI data center in Madison, North Carolina, and was disclosed in an 8-K filed November 10. The facility has two parts: a $200 million initial term loan and a $100 million delayed-draw term loan, which is a tranche that can be borrowed later once conditions are met. MLQ.ai also reported the financing.
As of the filing, no loans had been funded. Initial funding depends on the readiness and customer acceptance of the first 40 megawatts of capacity at NC-1 and on a mortgage over the site. It is scheduled within 30 days of closing, and that window can be extended twice by 30 days each. A week earlier, WhiteFiber said roughly 35 MW of the contracted 40 MW deployment was operational.
Executive Summary
WhiteFiber has secured committed debt for its first North Carolina AI campus, but the terms say more than the headline figure. The $300 million is not construction financing in the usual sense. It pays for or reimburses Phase 1 construction and punch-list costs only after the hall is ready and the customer has accepted it. The remaining $100 million waits for final completion, three months of financial statements and pro forma financial tests.
That sequencing matters to anyone financing AI infrastructure. The lenders are not underwriting a construction project. They are underwriting an operating, customer-accepted facility with a revenue stream. The structure also ties lender protections to the tenant through mandatory prepayments from customer letter-of-credit drawings and termination proceeds. WhiteFiber carried the build risk itself; the debt arrives once that risk is mostly retired.
The terms also show the cost of that capital. Interest is at least 8% before fees and premiums, and a make-whole provision applies to early repayment. The loan sets a reference point for how WhiteFiber may fund its newly acquired NC-2 and NC-3 sites. The company says spending there will follow definitive customer agreements and financing.
The Loan Funds the Finished Hall, Not the Build
The 8-K makes the lenders’ order of operations explicit. Initial funding requires the first 40 megawatts at NC-1 to be ready and accepted by the customer, along with a mortgage on the data center and other customary conditions. The proceeds then pay or reimburse Phase 1 construction and punch-list costs. Punch-list costs are the final fixes needed before a project is signed off. WhiteFiber’s November 3 release said capital investment for the initial contracted deployment was already substantially complete and expected to stay within budget. In practice, the company has spent the money and is now asking lenders to refinance a nearly finished asset.
The $100 million delayed-draw tranche sets an even higher bar. It becomes available only after initial funding and after the borrower delivers monthly financial statements for three consecutive full calendar months following delivery. Draws also require final completion of the 40 MW phase and passing pro forma financial tests, meaning projections of how the borrower’s finances look after the new debt. Lenders want to see the facility producing revenue before they extend the second slice. That is why the title claim holds: in this deal, AI data center debt waits for tenant acceptance.
The burden falls on developers. A builder that cannot carry construction on its own equity or bridge capital until a customer signs off would struggle to use a facility like this. Companies with balance-sheet capacity to fund the build up front, then refinance it, gain an advantage.
Tenant Credit Is the Collateral That Matters
On paper the collateral package is conventional project finance. It includes security over substantially all of the borrower’s assets, a pledge of the borrower’s equity by its parent Holdings, a guarantee from Holdings, and a mortgage on NC-1. The loans are not guaranteed by WhiteFiber, Inc. The borrower is ring-fenced, so lenders’ recourse rests mainly on the project and its cash flows rather than the listed parent.
The prepayment clauses show what the lenders treat as the real source of value. Mandatory prepayments apply to customer letter-of-credit drawings and customer termination proceeds. A letter of credit is a bank-backed promise of payment that a tenant posts as security. If the customer stops paying and the letter of credit is drawn, or if the customer pays to exit the contract, that cash goes to the lenders first. A specialized AI hall is worth far more with a paying tenant than without one, and the loan is built around that tenant’s ability to pay.
The pricing reflects single-asset, single-customer risk. Borrowers can choose Term SOFR plus 6.00% with a 2.00% floor, or the base rate plus 5.00% with a 3.00% floor. SOFR is the benchmark rate for overnight borrowing secured by US Treasuries. Either option puts the minimum rate at 8%. On top of that come a commitment fee on undrawn amounts, arranger and structuring fees, an upfront premium and funding premiums on each draw. Early repayment triggers a make-whole premium in the first two years, then 2.00%, then 1.00%, and nothing after the fourth anniversary. This is expensive capital, priced for a lender that is concentrated in one project and one revenue relationship.
Switchgear Showed Where the Schedule Risk Lives
The financing depends on finishing the last 5 MW. In its November 3 update, WhiteFiber disclosed that switchgear-related commissioning issues interrupted service and billing for the first 20 MW IT data hall. Switchgear is the heavy electrical equipment that routes and protects power inside a facility. Those issues pushed NC-1’s ramp to full contracted run-rate billing past the previously expected August timeframe. About 35 MW of the 40 MW deployment was operational at that point.
Because initial funding is tied to readiness and customer acceptance, any further commissioning delay directly delays the loan. The credit agreement allows 30 days after closing plus up to two 30-day extensions, which gives WhiteFiber roughly three months. Operators should note the order of events here. The electrical gear failed first, billing stopped, and then the financing date became uncertain. In AI facilities where one tenant takes a whole hall, an equipment fault can interrupt revenue as well as operations.
Before funding, White Fiber Operating Partnership LP must also deliver an unsecured guarantee covering Phase 1 completion, cost overruns and specified project carry costs. The required minimum net worth and liquidity of that guarantor are still being finalized. This puts some completion risk back on WhiteFiber’s operating entity, even though the parent company does not guarantee the debt.
A Template for NC-2 and NC-3
On October 28, WhiteFiber closed the $60 million all-cash purchase of two Yadkin County industrial properties, NC-2 and NC-3. The sites cover about 120 acres with 500,000 square feet of existing warehouse space and sit roughly 55 miles from NC-1. The company expects a combined minimum of 60 MW of gross utility capacity, with potential for up to about 198 MW within seven years, subject to confirmation and power availability. It is targeting initial ready-for-service capacity in late 2027.
The NC-1 loan suggests what financing those sites will require. WhiteFiber holds non-binding letters of intent, including proposals from investment-grade counterparties and proposals backed by investment-grade credit support. If lenders key on accepted capacity and tenant credit quality, those letters only matter once they become signed, credit-backed contracts. The company says it will align spending with definitive customer agreements and financing, which is consistent with that reading.
One provision could help the parent fund that next phase. Proceeds may be used for permitted distributions to equity holders, subject to the agreement’s terms. If NC-1 funds as planned, some of the equity WhiteFiber put into Phase 1 could flow back to the parent and become available for the next campus. Whether that happens, and how much, depends on terms that have not been disclosed.
Background
WhiteFiber, Inc. is a New York-based provider of AI infrastructure. It owns high-performance computing data centers and sells colocation, meaning space, power and cooling for customers’ own servers, as well as hosting and cloud services for generative AI workloads. The company went public on Nasdaq under the ticker WYFI in August 2025 after being carved out of Bit Digital. Its data center development runs through Enovum Data Centers Corp., a Canadian subsidiary.
NC-1 in Madison, North Carolina, is WhiteFiber’s first major US AI campus, built around a contracted 40 MW IT deployment. In late October 2026, the company expanded its North Carolina footprint by buying two former industrial sites in Yadkin County from Unifi Manufacturing. It plans to retrofit them as data centers, which is generally faster than building on empty land, as long as utility power is confirmed. Source: WhiteFiber lines up a $300 million Morgan Stanley loan for its North Carolina AI data center (MLQ.ai), coverage of WhiteFiber’s term loan financing for its NC-1 campus. Primary sources: WhiteFiber Form 8-K filed November 10, 2026 (Term Loan Credit Agreement); WhiteFiber Form 10-Q for the quarter ended September 30, 2026; WhiteFiber Form 8-K filed November 3, 2026 (completion of NC-2 and NC-3 acquisition); WhiteFiber press release, November 3, 2026: Completes Acquisition of Two North Carolina Data Center Development Sites and Provides NC-1 Update.Sources