Hut 8 adds US$1.07B secured credit line for AI campuses
The four-year line starts at SOFR plus 175 basis points and can back utility and equipment obligations with letters of credit.
Julian Okafor
A US$1.07 billion bank line gives an AI campus developer a way to secure utility and equipment commitments without tying up the same amount in cash. Hut 8 Corp. NASDAQHUT TSEHUT, the power and digital-infrastructure company building AI data centres and running compute operations, said in its Sept. 28 release that it closed a four-year senior secured revolving facility.
The facility is committed at Hut 8's parent company, but closing it does not mean the company received US$1.07 billion in cash. Monday's announcement gives no initial draw amount. Hut 8 can borrow as needed, subject to customary conditions, and repay without prepayment penalties.
Hut 8 shares ended Sept. 25 at US$96.82 on Nasdaq, according to NASDAQHUT at 4 p.m. EDT. Its Toronto listing ended Sept. 25 at C$137.00, according to TSEHUT at 4 p.m. EDT. Both closes preceded Monday's financing announcement.
The drawn borrowing margin begins at SOFR plus 175 basis points, or 1.75 percentage points above that floating benchmark. It can range from 150 to 200 basis points according to Hut 8's consolidated total-debt-to-market-capitalization ratio. The cost will also depend on how much Hut 8 borrows and the SOFR rate when it does. Hut 8 targets initial Beacon Point energization in the first quarter of 2027, according to its July 20 lease release.
The Line Can Secure Utility and Equipment Obligations
The facility includes a US$1.07 billion letter-of-credit sublimit, which sits inside the revolver rather than adding another US$1.07 billion to it. Hut 8 identified interconnection deposits and obligations to utilities and equipment vendors as uses for those letters. That lets the company provide security during site development while reducing the cash it needs to post as collateral.
A syndicate of 12 lenders supplied the line, according to the Sept. 28 release. Hut 8 did not identify a new customer lease, power contract or equipment purchase funded by the facility. Its announcement also did not specify an initial borrowing balance, the pledged collateral or financial covenants.
Chief financial officer Sean Glennan said the facility could carry projects through development while the company decides when to arrange longer-term financing. He described the aim for the parent company's capital structure this way:
"That approach helps us optimize our cost of capital, limit dilution, and continue building toward an investment-grade corporate profile," Glennan said in the Sept. 28 release.
A debt facility can avoid an immediate share issue, but a draw would add parent-level debt and interest expense. Letters of credit also use the line's capacity, so a fully utilized sublimit would not leave a second US$1.07 billion available to borrow. The release does not allocate any portion of the commitment to a named campus.
Project Notes Already Fund Two AI Campuses
Hut 8 closed US$3.25 billion of senior secured notes for River Bend in the second quarter, according to its Aug. 4 results. It also closed US$4.25 billion of notes for Beacon Point Phase 1 during that quarter. Those fully amortizing project notes total US$7.5 billion and have no recourse to Hut 8 Corp. The newly closed revolver is a separate commitment at the corporate parent level.
On Aug. 4, Hut 8 reported 949 megawatts of contracted IT capacity across River Bend and Beacon Point, backed by 1,330 megawatts of utility capacity in active construction. The company estimated US$26.6 billion in aggregate base-term lease value, a forecast spread across future contract terms rather than revenue already earned. Second-quarter revenue was US$74.9 million, including US$72.5 million from existing compute operations.
At Beacon Point, a July 20 lease added 352 megawatts of contracted IT capacity with the existing tenant. The two phases now cover 704 megawatts of IT load against 1,000 megawatts of utility capacity, Hut 8 said. Its Aug. 4 results said it was still evaluating financing structures for Beacon Point Phase 2, whose initial data hall is targeted for the second quarter of 2028.
River Bend's lease covers 245 megawatts of contracted IT capacity. Hut 8 has raised project notes for that first phase, but the Sept. 28 parent facility can support earlier development obligations across its pipeline. Its release does not assign the new bank line to the River Bend construction budget or to Beacon Point Phase 2.
Delivered Halls Remain the Next Test
The wait between a signed lease and rent is also visible in Mugglehead's earlier report on Barber Lake. Cipher Digital Inc. NASDAQCIFR, the developer and operator of industrial-scale data centres, said in its Sept. 25 release that an amended lease and a later AI lab commitment lifted expected Barber Lake revenue above US$9 billion. Cipher expects its first rent when initial data halls are delivered in the fourth quarter of 2026.
Read more: Cipher Digital reports AI lab commitment to enter later Barber Lake lease
Hut 8's scheduled physical checkpoint is Beacon Point's targeted initial energization in the first quarter of 2027, according to its July 20 lease release. Its Aug. 4 results put the first River Bend data hall in the second quarter of 2027. The first Beacon Point Phase 1 hall is targeted for the third quarter of 2027.
