Hut 8 Secures US$50 Million from Coinbase Credit to Enhance Financial Flexibility and Support Growth Initiatives
Luisa Crawford Jun 26, 2023 14:58
Hut 8 Mining Corp., a prominent North American mining pioneer and high-performance computing infrastructure provider, has recently made a significant announcement. The company has secured a credit facility of US$50 million through a partnership with Coinbase Credit
Hut 8 Mining Corp., a prominent North American mining pioneer and high-performance computing infrastructure provider, has recently made a significant announcement. The company has secured a credit facility of US$50 million through a partnership with Coinbase Credit, Inc., a leading lender in the cryptocurrency industry. This credit facility will provide Hut 8 with additional financial flexibility and support its general corporate purposes.
The credit facility consists of a US$15 million term loan, which is expected to be funded shortly after the closing of the agreement. Additionally, the credit facility offers the option to draw an additional US$20 million delayed-draw term loan in a second borrowing, taking place between one and two months following the initial funding. Furthermore, there is a provision for an additional US$15 million delayed-draw term loan tranche in a third borrowing within 15 business days after the completion of Hut 8's previously announced merger with U.S. Data Mining Group, Inc., also known as "US Bitcoin Corp." These borrowing options are subject to maintaining a specified loan-to-value ratio.
To determine the interest rate, the amounts borrowed under the credit facility will bear interest at a rate equal to the greater of the federal funds rate on the borrowing date or 3.25%, plus 5.0%. The credit facility has a maturity of 364 days from the date of the first borrowing. The borrower's interest in certain Bitcoin held in the custody of Coinbase Custody Trust Company, LLC serves as collateral for the loan obligations. Furthermore, the credit facility is guaranteed by Hut 8, providing an added layer of assurance for the lender.
CEO Jaime Leverton expressed enthusiasm for the credit facility, stating, "This credit facility gives us additional financial flexibility. At the same time, it ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving." This development aligns with Hut 8's strategic objectives and will contribute to its ongoing operations, growth initiatives, and expansion plans.
Hut 8 is a key player in the digital asset mining landscape, focusing on innovation and powered by a team of visionary technologists. With two operational digital asset mining sites located in Southern Alberta, Hut 8 boasts one of the highest capacity rates in the industry. Additionally, the company holds a substantial inventory of unencumbered, self-mined Bitcoin, solidifying its position as a major player in the global digital asset mining sector.
Moreover, Hut 8 is revolutionizing the data center industry by creating the first hybrid data center model that serves both traditional high-performance computing (Web 2.0) and emerging digital asset computing sectors, blockchain gaming, and Web 3.0. With over 36,000 square feet of geographically diverse data center space, Hut 8 is committed to sustainable practices, with its electrical grids powered by significant renewable and emission-free resources.
It is worth noting that Hut 8 made history by becoming the first Canadian digital asset miner to list on the Nasdaq Global Select Market, a significant achievement that underscores its market presence and leadership position. The company's relentless pursuit of innovation, combined with its passion for digital asset revolution, enables it to create value and positive impacts for shareholders and future generations.
While this announcement brings about positive prospects for Hut 8, it is important to exercise caution regarding forward-looking information. Factors such as security threats, regulatory changes, market demand, and unforeseen events like the COVID-19 pandemic and climate change can impact the company's operations and performance. Hut 8 acknowledges these risks and uncertainties, and although they consider their statements reasonable, actual results may differ materially from the forward-looking information provided.
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