• Potentia developed the Heartland Industrial Park in Sullivan County, IN
• Fluidstack, with Google backing, is acquiring land and developing the first 430 MW
• Potentia also developing projects in Oklahoma, Arkansas, and North Dakota

Potentia’s proposed Indiana data center project has surfaced in the high-yield bond market under new financial backing from Fluidstack and a Coatue-linked partner, with Google providing a crucial lease backstop for a USD 5.7bn senior secured debt financing that priced with a 6.25% coupon last week.

The financing, issued by Meridian Arc HoldCo, is being used to acquire about 140 acres in New Lebanon, Sullivan County, Indiana, to build two data centers totaling 430 MW of critical IT load, along with an on-site substation.

The parent is owned 49.9% by Fluidstack and 50.1% by Frontier Holdings Indiana, a related company of investment firm Coatue. Coatue is an equity backer of Anthropic.

The financing appears to sit on top of the Indiana project first developed by Potentia at Heartland Industrial Park in Sullivan County. In an interview, Fitch analysts Priyanka Jain Saxena and Anubhav Arora said the proceeds would be used by the Fluidstack-Frontier joint venture to buy land and develop the data center themselves. It was not immediately clear whether Potentia would remain involved in the project.

Representatives of Potentia, Fluidstack and Coatue did not respond to requests for comment.

Potentia CCO Ilich Vahimi was quoted in local media reports as a representative of Heartland. Vahimi is a former director of hyperscale sales at Compass Datacenters.

On its website, Potentia notes the Heartland project, which is near the coal-fired Merom Generating Station, has capacity for up to 2.1 GW and represents a USD 65bn investment. The company is also developing large projects in Oklahoma, Arkansas, and North Dakota, it says, while NPM is tracking additional projects in Virginia, Texas, New York, and Ontario.

The project has a Multi Party Service Agreement with Hoosier Energy and WIN Energy for power capacity. Because these utilities are co-ops, they are not required to file the agreements with the Indiana Utility Regulatory Commission, a Hoosier representative said via telephone.

Deal structure

The financing structure for the Indiana project is highly leveraged. Fitch said in a ratings report that the notes would fund the project at roughly a 92% debt-to-cost ratio alongside about USD 505m of sponsor equity funded at closing. Moody’s said each sponsor also provided a USD 100m construction completion guarantee.

The ratings firms said the project carries meaningful execution risk, with Fitch citing limited data center experience by both the sponsor and contractor, Arco, an aggressive construction schedule, and the absence of a guaranteed maximum price contract. Fitch and S&P pointed to mitigants including contingency, the yield-on-cost lease structure and the ability to “rentalize” cost overruns, with S&P saying overruns can be recovered up to USD 18m per MW.

The construction timetable allows 9.5 months to target floor access for Building 1’s first data hall and 10.5 months for Building 2, with the first 65 MW hall expected to start in July 2027.

In the Fitch interview, Saxena and Arora said Google’s guarantee of Fluidstack’s lease obligations is what underpins the BB rating even though Fluidstack itself is unrated.

Arora said tenant replaceability depends heavily on market and use case, including whether “it’s a great data center market which has really low latency to population centers,” because remote, single-purpose AI training facilities are harder to re-tenant if demand weakens.