Cipher Mining (CIFR.US) mimics its peers in planning to issue junk bonds to raise billions, causing the stock price to soar nearly 20%.

Cipher Mining (CIFR.US) plans to issue junk bonds to raise billions of dollars to expand its data center capacity. The company's move follows in the footsteps of TeraWulf (WULF.US), which recently raised $3.2 billion. On Friday, Cipher Mining's stock price surged over 20% at one point, ultimately closing up 19.73%. Sources say that similar to the deal with TeraWulf, Alphabet Inc. Class C, a subsidiary of Alphabet (GOOGL.US), will provide support for Cipher Mining's junk bonds. Last week, TeraWulf issued $3.2 billion in junk bonds to expand a data center. It is the first cryptocurrency mining company to raise funds using junk bonds (sub-investment grade bonds) instead of equity securities like convertible bonds. The bond issuance also marks the largest junk bond deal led by a single Wall Street bank since the famous RJR Nabisco leveraged buyout in 1989. Morgan Stanley led the bond issuance for TeraWulf, and is currently assisting Cipher in a similar bond issuance. TeraWulf's bond offering received over $11 billion in subscription orders. Investors were attracted by the "guarantee" provided by Alphabet Inc. Class C, as the tech giant has agreed to guarantee the debt once the related facilities are operational. The data center industry is currently seeking to expand capacity to meet the surging demand driven by the artificial intelligence trend. Junk bonds are being used for data center financing as a result. With the continuous occurrence of Bitcoin halving events leading to increasing mining difficulty and declining profits, many cryptocurrency mining companies are transitioning to data center operations.