Hut 8 locks in $1B credit line, but faces 40% liquidity rules
Letters of credit can cover site obligations without equivalent cash deposits, while borrowing would add corporate debt exposure. The post Hut 8 locks in $1B credit line, but faces 40% liquidity rules appeared first on CryptoSlate.
Bitcoin miner Hut 8 announced on Sept. 28 that it had closed a four-year, $1 billion senior secured credit line.
The facility gives the parent company room to borrow during site development and to back construction obligations with letters of credit. Its securities filing says no amounts were outstanding when the agreement closed on Sept. 24.
Hut 8 says letters of credit can support interconnection deposits and obligations to utilities and equipment vendors, reducing the cash it needs to post as collateral. The $1 billion letter-of-credit sublimit is contained within the overall commitment.
In effect, the line offers two ways to use a single pool of bank capacity: borrowing cash or securing eligible obligations.
Hut 8's June 30 balance sheet listed $233.6 million in cash, with restricted funds reported separately.
The line can help bridge interim development needs while Hut 8 decides when to arrange longer-term project financing, according to the company. That timing gives the parent a financing option while projects move through their earlier stages.