Hut 8 (HUT), a bitcoin miner turned energy and AI computing company, has refinanced its bitcoin-backed credit facility, replacing its existing Coinbase credit facility with a new $200 million facility with FalconX.
With the new deal, Hut 8 lowered its fixed rate to 7% from 9%, an improvement of 200 basis points, according to a press release. The move is part of the company’s focus on lowering the cost of debt on bitcoin-backed credit and broader capital costs, the company said. The deal also releases approximately 3,300 bitcoins previously held as collateral, worth about $260 million per share. 1 May, giving Hut 8 greater flexibility to use this capital.
“This refinancing strengthens our balance sheet by reducing our cost of debt while increasing Bitcoin held outside of collateral, resulting in additional liquidity to fuel the growth of our business,” said Sean Glennan, CFO of Hut 8.
“It furthers our broader goals of optimizing bitcoin’s role on our balance sheet and lowering our cost of capital,” he added.
The trend of refinancing for better terms continues among mining companies as they seek to improve their credit terms and free up more capital for their AI pivot, moving away from volatile bitcoin revenues in favor of long-term leases.
Last week, Hut 8 priced $3.25 billion of senior secured notes to finance the 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, cutting the rate to a fixed 6.15% from 8.3% and releasing 1,544 of the collateralized bitcoin, signaling growing lender 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 $200 million Coinbase credit facility, and bitcoin weakness could mean more selling
