Hut8 (HUT), a Bitcoin miner turned energy and AI computing company, has refinanced its Bitcoin-backed credit facility, replacing its existing Coinbase Credit agreement with a new $200 million facility with FalconX.
With the new agreement, Hut8 has lowered its fixed interest rate from 9% to 7%, an improvement of 200 basis points, according to a press release. The company said the move is part of its focus on reducing the cost of debt and broader cost of capital for Bitcoin-backed credit. The transaction also frees up approximately 3,300 bitcoins (valued at approximately $260 million as of May 1) that were previously pledged as collateral, giving Hut8 more flexibility in utilizing the funds.
Hut 8 Chief Financial Officer Sean Grennan said: “This refinancing reduces our cost of debt while strengthening our balance sheet by increasing our Bitcoin holdings outside of our collateral provisions, thereby injecting additional liquidity into the growth of our business.”
“This advances our broader goal of optimizing the role of Bitcoin on our balance sheet and lowering our cost of capital,” he added.
There continues to be a trend among mining companies to refinance for better terms, as they seek to improve credit terms to free up more capital for pivoting to AI and move away from volatile Bitcoin earnings in favor of long-term leases.
Hut8 last week priced $3.25 billion in senior secured notes to finance the construction of a 245-megawatt data center at its Riverbend 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 Google-backed AI 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 secured improved terms on its $200 million Bitcoin-backed credit facility with Coinbase, lowering its interest rate from 8.3% to a fixed 6.15% and releasing 1,544 Bitcoins pledged as collateral, demonstrating the lender’s growing confidence in its expanding data center business.
Hut8 shares rose about 1.5% on Monday as Bitcoin rose above $80,000.
Read more: Riot extends Coinbase credit line by $200 million, Bitcoin weakness could mean increased sales
