Hut 8 (HUT), a bitcoin miner turned vitality and AI compute firm, has refinanced its bitcoin-backed credit score facility, changing its present Coinbase Credit score association with a brand new $200 million facility with FalconX.
With the brand new deal, Hut 8 minimize its fastened rate of interest to 7% from 9%, a 200-basis-point enchancment, in response to a press launch. The transfer is a part of the agency’s concentrate on decreasing its price of debt on bitcoin-backed credit score and broader price of capital, the corporate mentioned. The deal additionally frees up roughly 3,300 bitcoin that had been beforehand pledged as collateral, value roughly $260 million as of Could 1, giving Hut 8 better flexibility to deploy that capital.
“This refinancing strengthens our balance sheet by decreasing our cost of debt while simultaneously increasing Bitcoin held outside collateral covenants, resulting in additional liquidity to deploy into the growth of our business,” mentioned Sean Glennan, CFO of Hut 8.
“It advances our broader objective of optimizing the role of bitcoin on our balance sheet and lowering our cost of capital,” he added.
The trend of refinancing for better terms continues among mining firms, as they seek to improve their credit terms and free up more capital for their pivot to AI and move away from volatile bitcoin revenues in favor of long-term leases.
Last week, Hut 8 priced $3.25 billion of senior secured notes to fund construction of a 245-megawatt data center at its River Bend campus in St. Francisville, Louisiana, according to an April 28 SEC filing. The project, first announced in December, has a 15-year, $7 billion lease with AI infrastructure firm Fluidstack, backed by Google, with a total potential value of up to $17.7 billion if all renewal options are exercised.
Another miner, Riot, also recently secured improved terms on its $200 million bitcoin-backed credit facility with Coinbase, lowering the rate to a fixed 6.15% from 8.3% and releasing 1,544 of pledged collateral bitcoin, signaling growing lender confidence in its expanding data center business.
Hut 8 shares rose about 1.5% on Monday as bitcoin rallied above $80,000.
Learn Extra: Riot extends $200 million Coinbase credit score facility, and bitcoin weak spot might imply extra gross sales
