Current Affairs Security

Galaxy's $3.5B Texas Bet: The Brutal Math of CoreWeave's Helios Race

2026-07-26

Galaxy just raised $3.507 billion in senior secured notes due 2031. The coupon: 9.875%. The math is simple and brutal. That's roughly $346 million in annual interest expenses—cash, semiannual, starting February 2027. Whether the data center delivers revenue or not.

This isn't abstract financial engineering. It's a hard deadline masquerading as a bond prospectus.

The money funds Phase II of Helios, Galaxy's AI data center campus in Dickens County, West Texas. CoreWeave—the AI infrastructure firm—has locked in the entire critical IT load under a 15-year base lease with two five-year extension options. Two buildings, eight data halls, 400 MW of utility capacity, 260 MW of critical IT load. That's the prize. If it arrives on time.

Galaxy needs Phase II operational by Q2 2027. Not late Q2. Early Q2. The debt terms require interest to flow starting February, amortising at 4% annually after payments kick in at least ten months post-completion. Miss that window and Galaxy services debt from cash reserves while construction limps along. The project economics crater.

They've done it before. Phase I delivered 133 MW of critical IT load to CoreWeave on schedule, beginning rent in Q2 2026. On budget, on time. That was the warm-up. Phase II doubles the capacity. It's the main event.

Their own projections show $472 million in rent and $424 million in net operating income for 2028. A 90% NOI margin. Assume Phase II opens as planned. Assume CoreWeave starts paying. Galaxy's presentation lists $10.4 billion in minimum contracted lease payments over the initial term. Across Phases I through III, CoreWeave has committed to 526 MW—the full 800 MW of gross power currently approved and contracted, expected to produce more than $1 billion in average annual revenue over the lease term.

The thing is: those numbers only work if construction doesn't slip.

And construction always has the potential to slip.

Phase II is currently in greenfield stage. Civil and structural work is underway. Data hall deliveries are slated to begin H1 2027. Translation: the margin for error is roughly zero. Weather delays, labour shortages, supply chain hiccups—any of those compounds the interest burden while the revenue tap remains closed.

What makes this interesting isn't just the size. It's the context. Galaxy acquired the site in December 2022 from Argo Blockchain for $65 million. It was a bitcoin mining facility. Galaxy pivoted it toward AI and HPC. That bet is now fully capitalised. The original mining economics are dead. The company has committed entirely to selling utility to AI firms under long-term leases. The reliability of those leases is the company's only hedge against rising cost of capital.

CoreWeave's 15-year commitments provide that durability. But only if they're backed by infrastructure that actually exists and actually delivers power when contracted. A five-month construction delay doesn't just delay revenue. It stretches the debt service period without offsetting income. The leverage ratio widens. The bond rating pressure intensifies. Other creditors get nervous.

This is Galaxy's first high-yield debt issuance. It signals confidence. It also signals urgency. Hyperscale buildouts don't wait. Neither do debt markets. The $346 million annual interest burden is manageable if execution stays on schedule. Becomes a material headwind if it doesn't. Galaxy has demonstrated they can execute Phase I. Phase II will determine whether that was luck or skill.

Source & further reading:

Sources