Coinmint LLC is turning to junk lending in order to fund a massive new mining op…
Coinmint LLC is turning to junk lending in order to fund a massive new mining operation. The project will repurpose a now-closed industrial site. CoinmintLLC is in the midst of a project to transform an aluminum smelter into a massive crypto mining operation by turning to the debt market. The operation is taking place in Massena New York just south of the CanadianBorder. The site itself is the former home of an unused industrial smelter previouslyowned by Alcoa Corp. Junkyard Yesterday Forbes reported that Coinmint hopes to [] borrow as much as $50 million over five years to purchase and install servers at its sprawling 1300-acre site [] This summer the company mentioned its willingness to invest roughly $700 million dollars in the project. While these numbers are certainly staggering the loan is small according to credit-market standards. The interest rates offered up may also sure to catch the eye of potential lenders: the interest rate for the senior secured revolving-credit facility may entice lenders. Coinmint has proposed an interest rate of as much as 12 percent a year [] which is higher than the average yields on the lowest-rated U.S. junk bonds. Coinmint co-founder Prier Leary highlighted the relationship between risk and rate. Leary says that for lenders who step outside of their comfort zone the new technology serves as a justification for raising rates: When youre talking about lenders getting into a new space that theyre not as comfortable with they will look at us as higher-risk and use that as an excuse to charge higher rates Upstate Mining Due to temperature and cost Canada and upstate New York have been embraced by miners looking for a cool and wide-open locale for their operations. In March and July Bitcoinist reported on the new set of rates that New York state has implemented for crypto miners. These changes have forced miners out of New York state. This summer a moratorium on crypto mining in Quebec was lifted. While the occasion ought to be a means for celebration small-time miners are outraged by the hard-hitting lobbying efforts from Bitmain What are your thoughts on junk bonds and their role in crypto projects? Dont hesitate to let us know in the comments below! Images courtesy of Shutterstock. The post Company Uses Junk Bonds to Convert Aluminum Smelter into a Giant Mining Operation appeared first on Bitcoinist.com. Via Bitcoinist.com bitcoinist.com ift.tt/2CKRWhH
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