Rating affirmation and outlook revision

S&P Global Ratings affirmed TeraWulf Inc (NASDAQ:WULF) with a BB‑minus issuer credit rating on 5 August 2026 and revised the outlook from positive to stable. In the same assessment, S&P assigned a BB‑minus rating to the subsidiary WULF Compute LLC, maintaining a positive outlook for the latter.

Lease transaction and project details

The rating actions were prompted by TeraWulf’s announcement of a 20‑year lease agreement valued at $19 billion with Anthropic for a new AI data‑center campus in Hawesville, Kentucky. The lease will support approximately 401 MW of compute capacity, with an initial phase expected to become operational in late 2027 and full capacity reached by early 2028. Once fully operational, the Hawesville facility is projected to generate about 48 % of TeraWulf’s total contracted revenue in 2029.

Credit considerations and outlook drivers

S&P cited uncertainty around the financing mix for the Hawesville campus, construction risk, and the fact that Anthropic is currently unrated as reasons for moving the outlook to stable. Management indicated that the lease would be underpinned by an investment‑grade credit, allowing for a potential lease enhancement if Anthropic remains unrated or receives a speculative‑grade rating. The agency also viewed the sale of TeraWulf’s interest in the Abernathy, Texas joint venture as a modest credit positive.

Risk mitigation and structural protections

Construction risk is partially mitigated through a design‑and‑construction agreement with Fluor, a phased delivery structure, and the presence of existing power and transmission infrastructure at the site. WULF Compute LLC’s lease payments are routed into a lockbox account controlled by a collateral agent and are distributed via a waterfall that first covers operating expenses, then mandatory debt amortisation, interest expenses, and finally any excess cash flow. The ratings could improve after full construction completion and benefit from a backstop provided by Google LLC.

Rating sensitivity thresholds

S&P warned that the rating could be lowered if Anthropic fails to achieve sufficient credit enhancement and the transaction is financed aggressively, which would push Funds‑From‑Operations (FFO) to debt below 7 % or EBITDA‑to‑interest coverage below 1.5×. Conversely, the rating could be raised if TeraWulf commits to maintaining debt‑to‑EBITDA below 6×, FFO‑to‑debt above 9 %, and EBITDA‑to‑interest coverage above 1.75×.