Hut 8 closes $1.07 billion credit facility with 40% liquidity requirement from 2027

Hut 8 has locked in a $1.07 billion, four-year revolving credit facility at the parent level, giving the Bitcoin miner and AI infrastructure developer fresh non-dilutive capital as it builds out power-hungry data center campuses. The facility comes with a minimum-liquidity covenant that could force the company to hold 40% of total commitments in reserve once the rule takes effect in 2027.

• Hut 8 closed the $1.07 billion senior secured revolving credit facility on September 24, with nothing drawn at closing.
• A minimum-liquidity covenant begins with the quarter ending March 31, 2027, requiring 40% of commitments before a defined stabilization date and 25% after.
• Term SOFR borrowings carry an initial margin of 175 basis points, adjustable between 150 and 200 points based on Hut 8’s debt-to-market-capitalization ratio.

• $1.07B four-year revolving facility, about 4.6x Hut 8’s June cash
• $233.6M cash Hut 8 held on its balance sheet as of June 30
• $7.5B prior non-recourse financing for River Bend and Beacon Point campuses
• 40% minimum liquidity covenant before stabilization, versus 25% after

Bitcoin miner Hut 8 Corp. announced on September 28 that it had closed a four-year, $1.07 billion senior secured revolving credit facility, according to reporting by CryptoSlate. The deal, disclosed in a press release, gives the Nasdaq- and TSX-listed company committed bank liquidity to draw on during site development or to back construction obligations through letters of credit. A related securities filing confirmed no amounts were outstanding when the facility closed on September 24.

Hut 8 closes $1.07 billion facility with nothing drawn

The facility names Hut 8 Corp. as borrower, with certain restricted subsidiaries guaranteeing its obligations. First-priority liens cover substantially all assets of the borrower and guarantors, subject to standard exclusions, according to an 8-K filing with the Securities and Exchange Commission.

The $1.07 billion letter-of-credit sublimit sits inside the same overall commitment as the cash borrowing capacity, the press release states. In practice, that means Hut 8 can tap one pool of bank capital either to borrow directly or to post letters of credit covering interconnection deposits and obligations to utilities and equipment vendors, cutting the cash collateral it would otherwise need to set aside.

J.P. Morgan acted as Lead Left Arranger, Bookrunner, and Administrative Agent, while Citi, Goldman Sachs and Morgan Stanley served as Joint Lead Arrangers and Joint Bookrunners. The facility was provided by a syndicate of 12 lenders, the company said.

40% liquidity threshold applies before a defined stabilization date

The agreement includes a minimum-liquidity covenant that begins with the quarter ending March 31, 2027. Hut 8 must maintain liquidity, as defined in the credit agreement, equal to 40% of total commitments before a stabilization date it has not disclosed, dropping to 25% afterward, with equity cure rights available if the company falls short.

That threshold sits against a June 30 balance sheet that showed $233.6 million in cash, reported separately from restricted funds, according to Hut 8’s quarterly filing. The new facility is more than four and a half times that cash balance, giving the company substantially more headroom than its unrestricted cash alone would provide.

Term SOFR loans under the facility carry an initial margin of 175 basis points, which can move between 150 and 200 basis points as Hut 8’s debt-to-market-capitalization ratio changes. The agreement also restricts additional debt and liens, subject to qualifications spelled out in the credit documents.

Sean Glennan frames the line as parent-level flexibility, not project debt

Sean Glennan, Hut 8’s chief financial officer, described the facility as part of a broader push toward an investment-grade corporate profile.

We are building a capital structure designed to scale with the business while giving us control over when, where, and how we deploy capital, flexibility that matters given the speed and capital intensity of AI infrastructure development.

Sean Glennan, Chief Financial Officer, Hut 8

Hut 8 has separately arranged $7.5 billion in non-recourse, fully amortizing project financing for its River Bend and Beacon Point AI data center campuses. Any borrowing or letters of credit issued under the new parent-level facility would create obligations at Hut 8 Corp. and its guarantors that sit alongside, rather than inside, those existing project structures.

The BlockWest read. The 40% liquidity covenant matters more to Hut 8’s balance-sheet flexibility than the headline $1.07 billion figure does. It effectively locks up several hundred million dollars of the facility as an untouchable reserve once the covenant starts in the quarter ending March 31, 2027, meaning the real deployable capital for construction and letters of credit is smaller than the topline number suggests until Hut 8 clears its undisclosed stabilization date.

Hut 8 has not disclosed the stabilization date that determines when its liquidity requirement drops from 40% to 25%, nor how much of the facility it intends to draw as River Bend and Beacon Point construction proceeds. Investors will get their next look at usage and covenant compliance when Hut 8 reports results for the quarter ending March 31, 2027, the first period in which the minimum-liquidity test applies.

BlockWest is a news publication. Nothing here is investment advice. Read our disclaimer and editorial policy.