Hut 8 Secures $1.07 Billion Credit Facility for AI Data Center Expansion
Bitcoin miner Hut 8 has finalized a four-year, $1.07 billion senior secured credit facility to support the development of its AI data centers.
Hut 8 announced on Sept. 28 that it closed a four-year, $1.07 billion senior secured credit line. The agreement, which was finalized on Sept. 24, provides the company with flexibility to fund site development and manage construction obligations.
The facility allows Hut 8 to either borrow cash or utilize letters of credit to cover interconnection deposits and vendor obligations. By using letters of credit, the company aims to reduce the amount of cash it must post as collateral for utility and equipment requirements. The total commitment includes a $1.07 billion sublimit for these letters of credit.
As of the closing date, the credit line remained unused. The agreement designates Hut 8 Corp. as the borrower, with obligations guaranteed by certain restricted subsidiaries. These obligations are backed by first-priority liens on substantially all assets of the borrower and its guarantors, with some exceptions.
Hut 8 stated that the facility serves as a bridge for interim development needs while the company determines the timing for long-term project financing. This provides the parent company with a financing option during the early stages of project development.
The cost of borrowing under the facility is tied to Term SOFR loans, with an initial margin of 1.75 percentage points above the benchmark. This margin is subject to adjustments between 1.50 and 2.00 percentage points based on the company's debt-to-market-capitalization ratio.
The agreement includes specific covenants, including restrictions on additional debt and liens. A minimum-liquidity covenant is set to begin with the quarter ending March 31, 2027, with thresholds established at 40% of commitments before a stabilization date and 25% thereafter.
