Hut 8 closes $1 billion credit line with 40% liquidity threshold

Hut 8 announced on Sept. 28 that it had closed a four-year, $1 billion senior secured credit line. Its filing says no amounts were outstanding at the Sept. 24 closing. The facility lets Hut 8 borrow during site development. Hut 8 says letters of credit can support interconnection deposits and obligations to utilities and equipment vendors, reducing the cash it needs to post as collateral. The $1 billion letter-of-credit sublimit is part of the overall commitment. Hut 8's June 30 balance sheet listed $233.6 million in cash, with restricted funds reported separately. Hut 8 says the line can cover interim development needs while it decides when to arrange longer-term project financing. The agreement names Hut 8 Corp. as borrower. Certain restricted subsidiaries guarantee its obligations. First-priority liens cover substantially all borrower and guarantor assets, subject to exclusions. Hut 8 described $7.5 billion of earlier financing for its River Bend and Beacon Point AI campuses as non-recourse project financing. Using the new line could create secured obligations at the parent and guarantor level alongside those project structures. If Hut 8 chooses Term SOFR loans, the initial margin is 1.75 percentage points above the benchmark. The margin can range from 1.50 to 2.00 percentage points as Hut 8's debt-to-market-capitalization ratio changes. The agreement restricts certain additional debt and liens, subject to qualifications. A minimum-liquidity covenant begins with the quarter ending March 31, 2027. Its threshold is 40% of commitments before a defined stabilization date and 25% afterward. The thresholds use the agreement's definition of liquidity and are subject to equity cure rights.