Hut 8 Corp. has closed a $1.07 billion senior secured revolving credit facility with a four-year term. According to CFO Sean Glennan, it adds more than $1 billion of committed, non-dilutive bank liquidity at the parent level.
Per Hut 8's Sept. 28 announcement:
The drawn margin ranges from SOFR plus 150 to 200 basis points, based on the company's consolidated total debt-to-market-capitalization ratio
The initial margin at closing is SOFR plus 175 basis points
Borrowings can be drawn as needed and repaid without prepayment penalties, subject to customary conditions
A syndicate of 12 lenders provided the facility, with J.P. Morgan as lead left arranger and administrative agent
Put simply, the margin Hut 8 pays over SOFR is tied to its debt relative to its market capitalization.
Collateral, Minus the Cash: The facility's sublimit for letters of credit is also $1.07 billion, so up to the full facility can go toward letters of credit.
Those letters support collateral requirements tied to site development, including interconnection deposits and obligations to utilities and equipment vendors. According to Hut 8, that reduces the need to post cash collateral.
Fund First, Structure Later: Glennan said the facility lets Hut 8 fund projects through development. At the same time, the company can determine the optimal timing and structure for long-term, non-recourse financing as those projects de-risk.
He added that the approach helps optimize the cost of capital, limit dilution, and keep building toward an investment-grade corporate profile.
The revolver builds on a track record that includes $7.5 billion of fully amortizing, non-recourse investment-grade project financing. That financing is for development and construction at Hut 8's River Bend and Beacon Point AI data center campuses.
Hut 8 builds infrastructure for energy-intensive tech. As its CFO noted, building AI infrastructure is capital intensive, too.
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