Nasdaq-listed Bitcoin mining company PowerCompute has consolidated $18 million in existing debt under a new Bitcoin-backed credit facility with Arch Lending, securing an initial interest rate of approximately 2% APR.

According to a Wednesday press release shared with Cointelegraph, PowerCompute pledged 307 Bitcoin (BTC) from its corporate treasury as collateral for the new facility. The company first entered a bridge loan arrangement with Arch on July 27 before finalizing the new credit facility on Monday.

The refinancing replaces three separate debt obligations: an $11 million loan from Galaxy Digital, a $5 million loan from SE and AJ Liebel used to acquire a 15-megawatt facility in Oklahoma, and an additional $2 million loan from Liebel used to purchase an 11-megawatt facility in Mississippi.

The new facility carries an initial interest rate of approximately 2% APR, a significant reduction from the 12% rate applied to the two Liebel loans, which together totaled $7 million. The interest rate is reset at each 30-day rollover period based on prevailing market conditions.

The arrangement enables PowerCompute to maintain its Bitcoin treasury exposure while reducing borrowing costs. The strategy aligns with a broader trend among public Bitcoin miners who have increasingly turned to crypto-backed credit facilities to access capital without liquidating holdings—particularly relevant following the April 2024 halving, which reduced block subsidy rewards by half and intensified pressure on mining operators to optimize balance sheets.

However, the terms require the company to post additional collateral if the price of Bitcoin declines, a standard provision in crypto-backed lending agreements. For a facility collateralized by 307 BTC, material price drawdowns could require PowerCompute to commit additional Bitcoin or face liquidation risk, underscoring the sensitivity of such structures to asset volatility.