Hut 8, a company that has evolved from a bitcoin miner to an energy and AI computing firm, has successfully refinanced its bitcoin-backed credit facility. The new $200 million facility with FalconX replaces the previous arrangement with Coinbase, resulting in a reduced fixed interest rate of 7% from 9%. This 200-basis-point improvement is part of the company's strategy to minimize its debt costs associated with bitcoin-backed credit and overall cost of capital. The new agreement also releases approximately 3,300 bitcoin, previously used as collateral, which are now valued at around $260 million as of May 1.

This development provides Hut 8 with greater flexibility to allocate this capital. According to Sean Glennan, CFO of Hut 8, 'This refinancing strengthens our balance sheet by decreasing our debt costs while increasing the amount of Bitcoin held outside collateral covenants, resulting in additional liquidity to deploy into the growth of our business.' Glennan further added, 'It advances our broader objective of optimizing the role of bitcoin on our balance sheet and lowering our cost of capital.' The trend of refinancing for more favorable terms continues among mining companies as they strive to enhance their credit terms and free up capital for their transition to AI and shift away from the volatility of bitcoin revenue in favor of long-term lease agreements. Recently, Hut 8 priced $3.25 billion of senior secured notes to fund the construction of a 245-megawatt data center at its River Bend campus in St. Francisville, Louisiana.

The project, announced in December, includes a 15-year, $7 billion lease with AI infrastructure firm Fluidstack, backed by Google, with a potential total value of up to $17.7 billion if all renewal options are exercised. Another mining company, Riot, has also secured improved terms on its $200 million bitcoin-backed credit facility with Coinbase, lowering the rate to a fixed 6.15% from 8.3% and releasing 1,544 of the pledged collateral bitcoin. This development signals growing lender confidence in its expanding data center business.

Hut 8 shares experienced a rise of about 1.5% on Monday as bitcoin surpassed $80,000.