Nasdaq-listed Bitcoin mining company PowerCompute has refinanced $18 million in outstanding debt through a new Bitcoin-backed credit facility with Arch Lending, significantly reducing its borrowing costs.
According to the company, the new financing arrangement consolidates three existing debt facilities into a single loan backed by 307 Bitcoin (BTC) held in PowerCompute’s treasury as collateral.
The company first entered into an initial bridge loan with Arch Lending on July 27, before finalizing the new credit facility earlier this week.
The new loan carries an initial annual percentage rate (APR) of approximately 2%, a substantial reduction from the 12% interest rate charged on two previous loans totaling $7 million.
The interest rate will be reviewed and reset every 30 days based on prevailing market conditions.
The refinancing replaces:
- An $11 million loan from Galaxy Digital.
- A $5 million loan from SE and AJ Liebel used to acquire a 15-megawatt Bitcoin mining facility in Oklahoma.
- A $2 million loan from AJ Liebel used to purchase an 11-megawatt mining facility in Mississippi.
By consolidating its debt under a lower-cost financing structure, PowerCompute expects to reduce financing expenses while maintaining exposure to its Bitcoin holdings.
Under the agreement, PowerCompute will retain ownership of its Bitcoin treasury, although the company may be required to provide additional collateral if the price of Bitcoin declines significantly.
The refinancing reflects a growing trend among digital asset companies to use Bitcoin-backed lending as a way to access lower-cost capital without selling their cryptocurrency holdings.
