Bitcoin miner Hut 8 Corp. announced on September 28 that it has closed a four-year, $1 billion senior secured credit facility, providing the company with significant financial flexibility for ongoing and future development projects.
The credit line allows the parent company to draw funds for site development activities and to issue letters of credit to back construction-related obligations. According to the company’s securities filing, no amounts were outstanding under the facility when the agreement closed on September 24.
The facility enables Hut 8 to utilize letters of credit for interconnection deposits and obligations to utilities and equipment vendors, thereby reducing the amount of cash required as collateral. A $1 billion letter-of-credit sub-limit is included within the overall credit commitment.
This structure provides the company two distinct uses for a shared pool of bank capacity—direct borrowing or securing eligible obligations—offering strategic versatility in managing its growth initiatives.
Development Flexibility with Parent-Level Exposure
As of June 30, Hut 8 reported $233.6 million in cash on its balance sheet, with restricted funds accounted for separately.
The new credit facility serves as a bridge to meet interim development needs while Hut 8 evaluates timing for longer-term project financing arrangements. This approach gives the parent company a financing option during the early phases of project development before pursuing dedicated project-level debt structures.
Under the terms of the agreement, Hut 8 Corp. acts as the borrower, with certain restricted subsidiaries providing guarantees for the obligations. First-priority liens secure substantially all assets of the borrower and guarantors, subject to standard exclusions.
Separately, Hut 8 referenced approximately $7.5 billion in earlier non-recourse project financing for its River Bend and Beacon Point AI campuses. The use of the new credit line may introduce secured obligations at the parent and guarantor level alongside these existing project-level financing structures.
For Term SOFR-based loans, the initial interest rate margin is set at 1.75 percentage points above the benchmark, with the ability to fluctuate between 1.50 and 2.00 points based on the company’s debt-to-market-capitalization ratio.
The agreement includes restrictions on additional debt incurrence and lien creation, subject to specified qualifications, alongside a minimum liquidity covenant that will take effect in the quarter ending March 31, 2027.
This covenant requires maintaining liquidity equal to 40% of commitments before a defined stabilization date and 25% thereafter. The calculation uses the agreement’s specific definition of liquidity and includes equity cure rights. The ultimate scale of parent-level obligations will depend on Hut 8’s decisions regarding borrowing amounts and letters of credit issuance.
