Marathon Digital said it has repaid a term loan and terminated its credit facilities with Silvergate Bank, according to a press release published on March 8th.
The marathon reduces debt, strengthens the balance
Marathon said this decision will reduce its debt by $50 million and increase its unlimited bitcoin holdings by an additional 3,132 BTC.
The crypto mining firm said the credit facility was a revolving line of credit (RLOC) that had no outstanding borrowings as of the termination date.
Marathon CFO Hugh Gallagher noted that the crypto industry has changed “significantly” since Marathon introduced these facilities last summer. Gallagher said that in response to these changes, the company has changed its financial strategy, bolstering its balance sheet with larger amounts of cash and unlimited bitcoin holdings.
Marathon published its activity report in February March 2. At the time, she said she had $410 million in unrestricted assets, including cash and bitcoin. Today’s decision by the company, as noted, will significantly increase these amounts.
The end of the deal was planned before Silvergate closed
Although Silvergate Bank announced today that it will cease operationsMarathon’s decision seems only partially related to this announcement.
Marathon said it completed the loan prepayment and termination today, March 8. However, it also said it had given Silvergate 30 days’ notice of its intention to repay the relevant loan and terminate its credit facilities in February. As such, Marathon appears to have planned to terminate these agreements long before the Silvergate debacle today.
Issues that arose around Silvergate last week – such as inquiries into the company’s participation in FTX — were known in the previous months. It is possible that these and other developments affected Marathon in the time leading up to the current crisis.
The news coincides with changes in the value of the shares. Marathon (MARA) is up 1.48% today and down 2.10% after hours. Silvergate (SI) is down 5.76% today and down 41.75% after hours.
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