Tether has provided $610M in debt financing to Bitcoin miner Northern Data

The Tether (USDT) stablecoin issuer is raising its bets on Bitcoin (BTC) mining by issuing a major debt offering to German-based BTC mining company Northern Data AG.

Northern Data AG has secured a 575-million-euro ($610 million) debt financing facility from Tether to drive additional investments, according to a Nov. 2 announcement.

The debt capital is specifically aimed at enabling Northern Data Group to invest in artificial intelligence cloud services provider Tyga Cloud, including Ardent Data Centers and the company's mining business Peak Mining.

The focus of these investments will be on acquiring additional hardware and acquiring bitcoin mining operations through liquid cooling mining technology, the announcement said. The debt facility is unsecured, at normal market conditions, and has a term through January 1, 2030.

According to Tether's Chief Technology Officer and CEO, Paolo Arduino, the credit facility is intended to be drawn down in full in 2024. Funded using the company's profits and Tether's stablecoin will not be part of a consolidated stock and will actually be done through a separate investment vehicle. Tether group to have proper separation,” Arduino emphasized.

Due to high interest rates on US Treasury bills, Tether is averaging $1 billion in net operating profit per quarter, the CEO noted:

“A significant portion of these profits have been wisely kept in reserves, which has contributed to the accumulation of surplus reserves. This strategy has allowed us to coordinate our stablecoin by over 104%.”

Tether also plans to reinvest a small portion of its profits into data, power and peer-to-peer communication infrastructure, Arduino said.

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The debt financing comes after Tether acquired a stake in North Data. In September 2023, the USDT issuer invested an undisclosed amount in North Data in a move to support its AI initiatives. Tether said the investment is separate from the deposit and will not affect client funds. Tether is moving into bitcoin mining operations in 2023, launching its own mining operations and introducing proprietary mining software.

According to Tether's Q2 data from accounting firm BDO, the stolkcoin company's surplus increased by $850 million. In the year By September 2023, its stablecoin loans have reportedly increased, despite the company working to cut such loans to zero over the past year.

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