Fermi signs $6.5 billion lease with TensorWave at Project Matador
The 15-year phase one lease covers 222 MW of total power capacity and is backed by credit support from AMD.
Key takeaways
- Fermi Inc. (FRMI) said in a fact sheet posted on Oct. 14 that it has signed a binding 15-year phase one lease with TensorWave at its Project Matador site. The lease has $6.5 billion in phase one contracted revenue and 222 MW of total power capacity, with credit support from AMD.
Fermi Inc. (FRMI) said Wednesday in a fact sheet posted to its investor website that it has signed a binding 15-year phase one lease with TensorWave at its Project Matador site.
The phase one contracted revenue is $6.5 billion over the 15-year initial term. The fact sheet was furnished as Exhibit 99.1 to a Form 8-K.
The lease covers 222 MW of total power capacity and 156 MW of critical IT capacity. Phased delivery begins in the fourth quarter of 2027 and completes in early 2028.
The lease is turnkey. Fermi develops, builds and delivers the facility, and TensorWave takes occupancy in phases.
The initial term is 15 years, with two five-year renewal options. Rent carries 2.5% annual escalators.
The company estimates a phase one project-level NOI margin, or net operating income margin, of approximately 75% to 80%. Natural gas and variable power charges are passed through to the tenant.
The fact sheet puts power capital expenditure at $3 million to $4 million per MW of total power capacity. Turnkey data center capital expenditure is $10 million to $12 million per MW of critical IT capacity.
AMD has signed a credit support agreement for the lease. The fact sheet gives AMD's ratings as A with a stable outlook from S&P and A1 with a stable outlook from Moody's.
AMD's support begins once construction is complete and rent starts. The fact sheet says it supports project financing.
The credit support ends early if TensorWave or its guarantor holds an investment-grade rating for 12 consecutive months.
TensorWave is an AI cloud built exclusively on AMD Instinct GPUs, according to the fact sheet. It raised a $350 million Series B, and investors include AMD, Magnetar, Maverick Silicon and Nexus Venture Partners.
The fact sheet says TensorWave has more than 2 GW of secured capacity across its platform.
The fact sheet does not include an executive comment on the lease. It also does not describe terms for any later phases.
The fact sheet also presents expected Project NOI, a non-GAAP measure that excludes depreciation, interest and variable power charges. The company said it has not reconciled the measure to operating income because the facility has not commenced operations.