Wall Street-listed Bitcoin (BTC) miner Core Scientific (NASDAQ: CORZ) has paid down $267 million in debt using proceeds from its recently closed convertible senior notes offering.

Core Scientific to Pay Off $267 Million in Debt

The debt repayment includes $150 million in secured notes, $61 million from an exit facility and $56 million in mining equipment loans. The move significantly reduces the company’s interest expense, with rates dropping from as high as 12.5% ​​on its previous loans to 3% on the new convertible notes.

Core Scientific announced and priced a larger convertible senior notes offering on August 13-14, 2024. The company initially proposed an offering of $350 million, which was increased to $400 million of convertible senior notes due 2029.

$CORZ Strengthens balance sheet and supports growth plans with proceeds from recent convertible bond issuance – Repays $267 million of debt, reducing interest rates from approximately 12.5% ​​to 3% – Removes restrictive covenants associated with certain bonds – Increases cash position… photo.twitter.com/ePyzjYOBMV

— Core Scientific (@Core_Scientific) August 20, 2024

After paying down debt and covering offering expenses, Core Scientific added $172.8 million in cash to its balance sheet. The company plans to use these funds to support site acquisitions and initiatives in its high-performance computing (HPC) hosting business.

“With this transaction now complete, we can move forward with additional financial flexibility to invest in the continued expansion of our HPC hosting capacity while strengthening our Bitcoin mining operations,” said Adam Sullivan, CEO of Core Scientific.

Marathon Digital Holdings, another publicly traded BTC miner, also recently successfully closed a $300 million convertible senior notes offering. However, the funds raised were not used to pay down debt, but to acquire a substantial amount of Bitcoin, worth $249 million.

From BTC to HPC

More and more cryptocurrency miners are turning their attention to AI and HPC, a trend confirmed by recent analysis from investment management firm VanEck. This transition is being driven by miners’ desire to diversify their operations and capitalize on the growing demand for AI computing power. According to Matthew Sigel, head of digital assets research at VanEck, this strategic shift has the potential to unlock $38 billion in value for the mining sector by 2027.

Notable examples of this trend have been visible since last year. For example, HIVE Blockchain has transitioned to HIVE Digital to more accurately reflect its expanded focus. While the company continues its BTC mining activities, it is now also increasing its involvement in the HPC and AI sectors. Following this strategy, HIVE Digital recently announced the construction of a new hydroelectric data center, a move that is expected to double its revenue streams.

The importance of HPC is also evident in the latest quarterly report from another miner, BitFuFu. “Cloud mining revenues contributed approximately 60% of BitFuFu’s second quarter revenues. Our cloud mining business allows us to effectively lock in the price of Bitcoin, which serves as a hedge against Bitcoin price volatility,” said Leo Lu, the company’s chairman and CEO.

Core Scientific operates eight data centers in five states. The company generates revenue primarily from Bitcoin mining on its own behalf and by providing hosting services to third-party customers. The company is one of the five largest publicly traded BTC miners on Wall Street, with a market cap of $1.7 billion.

This article was written by Damian Chmiel on www.financemagnates.com.