PowerCompute refinances $18M with 2% Bitcoin-backed loan

PowerCompute consolidated three debt facilities totaling $18 million into a new Bitcoin-backed credit facility with Arch Lending, pledging 307 BTC from its treasury as collateral and obtaining an initial interest rate near 2% APR. The company entered an initial bridge loan with Arch on July 27 and moved into the new facility on Monday, according to a press release.

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 Oklahoma mining site, and a separate $2 million loan from Liebel that funded an 11-megawatt Mississippi facility.

Under the new agreement, the interest rate is reset at each 30-day rollover and will reflect prevailing market conditions at those intervals. The initial rate is substantially lower than the roughly 12% APR applied to the two Liebel loans that together totaled $7 million.

Because the credit line is secured by 307 BTC, PowerCompute can retain those coins rather than selling them to service the debt. The company may be required to post additional collateral or face lender remedies if the value of the pledged Bitcoin falls below agreed thresholds.

The transaction moves loans that had been tied to specific mining-asset purchases into a single credit line under one agreement. The lender holds the pledged Bitcoin as collateral under the terms of the facility.

The loan structure ties repayment terms to the value of the digital asset: lenders gain security linked to Bitcoin, and borrowers assume price risk through collateral requirements and potential margin calls.

PowerCompute described the arrangement in its press release as allowing the company to retain Bitcoin exposure while addressing its financing needs.