PowerCompute said it has refinanced and consolidated $18 million of existing debt into a Bitcoin-backed credit facility with Arch Lending, using 307 BTC from its treasury as collateral. The company said the move lowers borrowing costs while allowing it to avoid selling its Bitcoin holdings.
According to PowerCompute, the new arrangement replaces three existing debt facilities and starts with an interest rate of about 2% APR. The company said that compares with 12% on its previous Liebel loans, framing the refinancing as a way to reduce financing expense and preserve exposure to any future rise in Bitcoin's price.
Three loans rolled into one facility
PowerCompute said the refinancing followed a short bridge loan that temporarily consolidated its three debt facilities over a three-day period. After that step, the company said it signed a non-recourse collateral loan facility with Arch Lending on Aug. 3.
The new revolving facility is backed by 307 BTC pledged from PowerCompute's treasury. Rather than liquidating those holdings to pay down obligations, the company said it chose to use them as collateral so it could refinance existing debt and keep the Bitcoin on its balance sheet.
Lower initial cost, but terms reset monthly
The company said the Arch Lending facility renews every 30 days unless either side gives notice that it will not continue. At each renewal, the interest rate as well as the floor and ceiling prices are reset based on market conditions.
PowerCompute said the initial rate is about 2% APR, substantially below the 12% rate it said applied to its prior Liebel loans. Chairman, chief executive officer and president Bruce M. Rodgers said the refinancing cuts interest expense while supporting the company's effort to maintain strategic exposure to its Bitcoin treasury as it expands into high-performance computing and artificial intelligence infrastructure.
Arch Lending's structure and stated purpose
Arch Lending described the agreement as a Bitcoin-backed credit facility that uses a proprietary hedging structure intended to reduce liquidation risk while also lowering financing costs.
Himanshu Sahay, Arch Lending's co-founder and chief technology officer, said the financing was structured around PowerCompute's immediate funding needs and its longer-term Bitcoin treasury approach. The company said the facility gives PowerCompute a way to refinance obligations without being forced to sell Bitcoin to do so.
Risks remain tied to Bitcoin and operating conditions
PowerCompute said the facility still carries market risk because the value of the collateral depends on Bitcoin's price. If that value falls, the company may be required under the loan terms to post additional Bitcoin.
In its forward-looking statements, the company also pointed to ongoing compliance requirements under the facility and broader risks linked to cryptocurrency mining, its expansion into HPC and AI infrastructure, equipment availability, financing conditions and changing regulations. Bitcoin-backed lending has increasingly been used by companies seeking to unlock capital while retaining treasury exposure, but PowerCompute's next confirmed step is the facility's rolling 30-day renewal process, where pricing and collateral parameters can be reset to current market conditions.
Source: crypto.news