Hut 8 secures $1 billion credit line, faces 40% liquidity rules

Hut 8 announced on Sept. 28 the closure of a four-year, 1 billion dollar senior secured credit line. This facility allows the company to borrow during site development and back construction obligations with letters of credit. No amounts were outstanding when the agreement closed on Sept. 24. The credit line supports interconnection deposits and obligations to utilities and equipment vendors, reducing the cash needed as collateral. The 1 billion dollar letter-of-credit sublimit is part of the overall commitment. Hut 8's balance sheet as of June 30 listed 233.6 million dollars in cash. The line aids in bridging interim development needs while the company considers longer-term project financing. The agreement names Hut 8 Corp. as the borrower, with certain restricted subsidiaries guaranteeing obligations. First-priority liens cover most assets of the borrower and guarantors. Hut 8 previously described 7.5 billion dollars of financing for its River Bend and Beacon Point AI campuses as non-recourse project financing. The new line could create secured obligations at the parent and guarantor level. If Hut 8 opts for Term SOFR loans, the initial margin is 1.75 percentage points above the benchmark, ranging from 1.50 to 2.00 points based on the debt-to-market-capitalization ratio. The agreement imposes restrictions on additional debt and liens, with a minimum liquidity covenant starting March 31, 2027, requiring 40% liquidity before a stabilization date and 25% afterward.

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