Hut 8 Corp. closed a four-year, $1 billion senior secured credit line on September 24, 2025, the company announced four days later. Nothing was drawn at closing, and the facility includes a $1 billion letter-of-credit sublimit inside the overall commitment.
The borrower is Hut 8, with certain restricted subsidiaries guaranteeing the obligations. Lenders hold first-priority liens on substantially all assets of the borrower and the guarantors, subject to exclusions. The agreement restricts additional debt and liens, with qualifications.
What the facility can be used for
The credit line allows Hut 8 to borrow cash or to secure eligible obligations. Those eligible uses include interconnection deposits and utility or equipment vendor obligations. In practice, that means Hut 8 can use letters of credit instead of posting cash for deposits and vendor commitments, preserving liquidity for other parts of the business.
Hut 8 reported $233.6 million in cash on its June 30 balance sheet. Restricted funds are reported separately. The company described $7.5 billion of earlier financing for its River Bend and Beacon Point AI campuses as non-recourse project financing.
The credit line can bridge interim development needs while Hut 8 decides when to arrange longer-term project financing, according to the company's description of the facility.
Pricing tied to leverage
Term SOFR loans under the facility carry an initial margin of 1.75 percentage points above the benchmark. That margin ranges from 1.50 to 2.00 percentage points depending on Hut 8's debt-to-market-capitalization ratio. The pricing grid gives the company a path to a lower spread if leverage falls, and a higher one if it rises.
Covenant starts in 2027
A minimum-liquidity covenant begins with the quarter ending March 31, 2027. It requires liquidity equal to 40% of commitments before a defined stabilization date, then 25% afterward. The agreement includes equity cure rights, which let Hut 8 address a breach by raising equity rather than only by repaying debt or posting more collateral.
The covenant start date gives Hut 8 more than a year before the liquidity test kicks in. Until then, the main constraints are the negative covenants on additional debt and liens.
What to watch
The key open question is how much of the $1 billion Hut 8 draws or uses for letters of credit, and when. At closing, the answer was zero. The company has said the facility can support interim development needs while it decides on longer-term project financing for its AI campuses, so the pace of draws may signal how those financing decisions are progressing.
Hut 8's next quarterly balance sheet will show whether any amount is outstanding and how much of the letter-of-credit sublimit has been used. The first liquidity test arrives with the quarter ending March 31, 2027.
