Hut 8 (HUT), a Bitcoin miner turned energy computing and AI company, has refinanced its Bitcoin-backed credit facility, replacing its existing Coinbase credit agreement with a new $200 million facility with FalconX.
With this new agreement, Hut 8 reduced its fixed interest rate from 9% to 7%, an improvement of 200 basis points, according to a press release. The move is part of the company’s efforts to reduce its debt cost on bitcoin-backed credits and the broader cost of capital, the company said. The deal also releases approximately 3,300 bitcoins previously pledged as collateral, worth approximately $260 million as of May 1, giving Hut 8 greater flexibility to deploy this capital.
“This refinancing strengthens our balance sheet by reducing our cost of debt while simultaneously increasing Bitcoin held outside of collateral covenants, resulting in additional liquidity to deploy in growing our business,” said Sean Glennan, CFO of Hut 8.
“This advances our broader goal of optimizing the role of bitcoin on our balance sheet and reducing our cost of capital,” he added.
The trend toward refinancing on better terms continues among mining companies, as they seek to improve their credit terms and free up more capital for their transition to AI and away from volatile bitcoin revenues in favor of long-term leases.
Last week, Hut 8 assessed $3.25 billion in senior secured notes to finance construction of a 245-megawatt data center at its River Bend campus in St. Francisville, La., according to an April 28 filing with the SEC. The project, first announced in December, has a $7 billion, 15-year 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 the rate from 8.3% to a flat 6.15% and releasing 1,544 bitcoins of pledged collateral, signaling lenders’ growing confidence in its expanding data center business.
Hut 8 shares rose about 1.5% on Monday as bitcoin topped $80,000.
Read more: Riot extends Coinbase credit facility by $200 million, and Bitcoin weakness could lead to increased sales
