Bitcoin mining company Hut 8 announced on June 26 that its subsidiary, Hut 8 Holdings, has secured a credit facility agreement worth $50 million with Coinbase Credit. The purpose of this agreement is to support the company’s general corporate needs. Under the terms of the agreement, Hut 8 will receive a $15 million term loan upon or shortly after the closing of the deal. Furthermore, the credit facility allows the company to access a delayed-draw term loan of $20 million within one to two months following the closing.
In addition to these provisions, Hut 8 can borrow an additional $15 million through a delayed-draw term loan tranche within 15 business days after finalizing its merger with U.S. Data Mining Group, which is also known as US Bitcoin Corp. The interest rates for all borrowed amounts under the Credit Facility will be calculated as follows: the greater of (i) the federal funds rate on the date of borrowing, or (ii) 3.25%, plus 5.0%.
To secure the credit facility, Hut 8 has pledged an undisclosed amount of Bitcoin held in Coinbase Custody. The loan is set to mature 364 days after the first borrowing. Hut 8 CEO Jaime Leverton expressed satisfaction with the credit facility, highlighting its contribution to the company’s financial flexibility and ability to uphold its dynamic Bitcoin treasury management strategy leading up to the halving. However, the company’s stocks did not experience a positive reaction to the announcement, with a slight decline of 0.51% to $2.915, according to Nasdaq data.
Overall, Hut 8’s subsidiary, Hut 8 Holdings, has secured a $50 million credit facility agreement with Coinbase Credit. The credit facility provides the company with additional financial flexibility and ensures the continuity of its Bitcoin treasury management strategy.