Hut 8 (HUT), a Bitcoin miner turned energy and artificial intelligence computing company, has refinanced its Bitcoin-backed credit facility, replacing its existing Coinbase credit facility with a new $200 million credit facility from FalconX.
With the new agreement, Hut 8 is reducing its fixed rate from 9% to 7%, an increase of 200 basis points, according to the release. The move is part of the company’s efforts to lower the cost of debt and broader capital costs for Bitcoin-backed credit, the company said. The transaction also frees up approximately 3,300 Bitcoin previously pledged as collateral, worth approximately $260 million as of May 1, allowing Hut 8 to deploy these funds more flexibly.
“This refinancing strengthens our balance sheet by lowering the cost of debt while increasing Bitcoin held outside of collateral covenants, providing additional liquidity to grow our business,” said Hut 8 Chief Financial Officer Sean Glennan.
He added: “It advances our broader goal of optimizing the role of Bitcoin on our balance sheet and lowering our cost of capital.”
Mining companies continue the trend of refinancing as they seek to improve credit conditions, free up more capital to pivot to AI, and move away from volatile Bitcoin revenue toward long-term leases.
Hut 8 last week priced $3.25 billion in 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, signed a 15-year, $7 billion lease with Google-backed artificial intelligence infrastructure company Fluidstack, with a total potential value of up to $17.7 billion if all renewal options are exercised.
Another miner, Riot, also recently reached an improvement on its $200 million Bitcoin-backed credit facility with Coinbase, lowering the interest rate from 8.3% to 6.15% and releasing 1,544 collateral Bitcoins, a sign of the lender’s growing confidence in its expanding data center business.
Hut 8 shares rose about 1.5% on Monday as Bitcoin rose above $80,000.
Read more: Riot extends $200M credit line to Coinbase, Bitcoin weakness could mean more sales
