HUT Stock Dips After Firm Seeks To Sell $3B In Bonds To Help Finance Google-Linked AI Data Center

• Hut 8 reportedly plans to raise $3.25 billion through senior secured notes to fund a large-scale data center in Louisiana.
• The project is backed by a long-term lease with Fluidstack, with Google providing financial support for the agreement.
• The move reflects a broader shift among Bitcoin miners toward artificial intelligence and high-performance computing infrastructure.

Hut 8 Corp (HUT) was trading lower on Monday as the Bitcoin (BTC) mining company was reportedly seeking to raise $3.25 billion through senior secured notes to finance the construction of a large-scale data center in Louisiana.

According to The Energy Mag report, the notes, which mature in 2042, will be issued through a subsidiary and will be used to finance a 245-megawatt plant at the company's River Bend campus in St. Francisville, Louisiana. Proceeds will also be used to repay past equity investments and fund project reserves related to the development.

The project is backed by a 15-year, $7 billion lease deal with cloud computing company Fluidstack, which has leased the whole first phase of the property. The deal also gives Fluidstack the option to extend use by as much as 1,000 megawatts in future stages, depending on the availability of power. Google (GOOG/GOOGL) is providing a financial backup for the basic lease period.

Infrastructure-Style Financing Model

In contrast to the balance sheet-driven borrowing that Bitcoin miners usually employ, the article claimed that the funding is structured at the project level through Hut 8 DC LLC, more closely matching it with infrastructure and project finance models.

According to the report, the offering received a preliminary BBB rating from credit rating firms Fitch and S&P Global Ratings, which puts it in the lowest category of investment-grade debt. Risks that S&P identified included the requirement to bring the facility up on time, reliance on a single tenant, and construction execution.

The data center's income is predicted to be at $171 million in its first full year of operation, climbing to nearly $547 million annually by 2041, with free cash flow growing over time.

Bitcoin Miners Expand Beyond Mining

While Bitcoin miners have previously raised debt to fund operations or accumulate Bitcoin, like Marathon Digital’s (MARA) convertible note offerings, Hut 8 Corp’s bond issuance is aimed at financing data center infrastructure.

The move comes as mining corporations have shifted more of their focus to artificial intelligence (AI) and high-performance computing (HPC) operations. Unlike traditional mining operations, the River Bend project has contracted long-term income, so cash flows are more predictable.

The size of the financing, over $3 billion for one campus, puts Hut 8 in the same boat as a growing collection of companies pursuing big scale AI infrastructure buildouts, including Core Scientific (CORZ) and Applied Digital.

HUT’s stock was trading down by over 2% during mid-day trading hours. On Stocktwits, the retail sentiment around HUT remained in the ‘neutral’ zone, while chatter around it stayed ‘high’ levels over the past day.

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