Marathon Digital has repaid its term loan and terminated its credit facility with Silvergate Bank, according to a press release announcing: March 8.
Marathon reduces debt and strengthens balance sheet
Marathon said the decision would reduce his debt by $50 million and increase his unlimited Bitcoin holdings by another 3,132 BTC.
According to the cryptocurrency mining company, the credit facility is a revolving credit facility (RLOC) and had no outstanding borrowings at the end date.
Marathon CFO Hugh Gallagher said the cryptocurrency industry has “changed significantly” since Marathon set up these facilities last summer. Gallagher said that in response to these changes, the company has changed its financial strategy by beefing up its balance sheet with more cash and unlimited bitcoin holdings.
Marathon released its February operational report on March 2nd. At that point, the company said it held his $410 million in unrestricted assets, including cash and bitcoin. The company’s decision today significantly increases these amounts, as noted above.
Contract termination planned prior to Silvergate closure
Silvergate Bank announced today that it will cease operations, and Marathon’s decision appears to be partly related to that announcement.
Marathon said it completed the prepayment and termination of the term loan today, March 8. However, he also said he gave Silvergate 30 days’ notice of his intention to repay the related loan and terminate the line of credit in February. As such, Marathon apparently planned to end those contracts long before today’s Silvergate debacle.
The issues that surfaced last week surrounding Silvergate, including inquiries about the company’s involvement in FTX, have been known for months. These and other developments may have affected Marathon in the hours leading up to the current crisis.
This news coincides with the volatility of stock prices. Marathon (MARA) is up 1.48% today and after hours he is down 2.10%. Silvergate (SI) is down 5.76% today and after hours he is down 41.75%.