Marathon closed a deal for a $100 million loan from Silvergate Bank collateralized by bitcoin, a move that comes as other miners have sold bitcoin in an effort to pay down their debts.
The company also refinanced a previous $100 million bitcoin-backed loan that it had previously secured with the same firm, it announced Monday after the market close.
The new revolving line of credit allows Marathon to draw $50 million initially and an extra $50 million up to 270 days after closing (on July 28). It has a variable interest rate and is currently priced at 7.25%.
"We are pleased to be closing on these debt facilities and believe that the combination of a term loan and revolver provide Marathon with exceptional flexibility as to our funding options,” said Marathon CFO Hugh Gallagher.
Marathon announced Monday that it had no outstanding balance on the original loan, which was set to expire in October 2022. The two credit facilities will now mature in July 2024.
As bitcoin's value fell by about a third in June, companies like Bitfarms and Argo sold a large portion of their bitcoin holdings (3,000 and 637 BTC, respectively) to reduce the outstanding balance on various loans. Core Scientific sold a total of 7,202 BTC during the same time period.
On Monday, Bitfarms said that it sold an additional 1,623 BTC in July to further reduce its bitcoin-backed loan down to $23 million.
Marathon, however, said last month that it had 10,055 BTC in reserve and hadn't sold any since October 2020.
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