Hut 8 (HUT), a bitcoin miner turned AI and energy computing company, has refinanced its bitcoin-backed credit facility, replacing its existing Coinbase credit agreement with a new $200 million credit facility with FalconX.
With the 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 focus on reducing the cost of debt on bitcoin-backed credit and the broader cost of capital, the company said. The deal also frees up approximately 3,300 bitcoins that had previously been pledged as collateral, worth approximately $260 million as of May 1, giving Hut 8 greater flexibility to deploy that capital.
“This refinancing strengthens our balance sheet by lowering our cost of debt while increasing Bitcoin held outside of collateral covenants, creating additional liquidity to deploy in growing our business,” said Sean Glennan, Hut 8 CFO.
“This furthers our broader goal of optimizing bitcoin’s role on our balance sheet and reducing our cost of capital,” he added.
The trend of refinancing for better terms continues among mining companies as they look to improve their credit conditions and free up more capital for their pivot into AI and away from volatile bitcoin revenues in favor of long-term leases.
Last week, Hut 8 priced $3.25 billion in senior secured notes to finance 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 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 better terms for its $200 million bitcoin-backed credit facility with Coinbase, reducing the rate to a flat 6.15% from 8.3% and releasing a promised 1,544 bitcoins in collateral, signaling growing confidence from lenders in its growing data center business.
Hut 8 shares rose about 1.5% on Monday as bitcoin surpassed $80,000.
Read more: Riot extends Coinbase credit line by $200 million and bitcoin weakness could mean more sales
