HIVE upsizes and prices $115M zero-coupon exchangeable notes

HIVE Digital Technologies has priced a privately placed offering of $115 million of 0% exchangeable senior notes due 2031, after increasing the originally announced size of the deal. The financing, structured as exchangeable debt tied to HIVE common shares, is expected to close at the end of June and is designed to support capital spending at its data center and high-performance computing businesses.

The offering comes amid a broader push by crypto infrastructure operators to secure multi-year funding for power-intensive compute and digital asset-related deployments. While HIVE’s notes are not traditional interest-bearing debt, their exchange features and hedging arrangements can still affect equity dynamics and investor positioning over the life of the instrument.

Deal size increased, option to add more notes

According to the company, HIVE Bermuda 2026 Ltd., a wholly owned subsidiary and the issuer, will issue $115 million aggregate principal amount of the notes. The amount was increased from $100 million that had been previously announced.

In addition, the initial purchasers received an option exercisable within 13 days after the first issuance to purchase up to an additional $15 million principal amount of notes. The company expects the sale to close on June 30, 2026, subject to customary closing conditions.

How the notes work, including the zero-coupon feature

The notes are described as general unsecured obligations of the issuer. HIVE has agreed to fully and unconditionally guarantee the notes on a senior unsecured basis.

Key terms include:

• Coupon: 0% regular interest and no principal accretion.
• Maturity: July 1, 2031, unless earlier exchanged, redeemed, or repurchased.
• Exchange timing: Before April 1, 2031, exchange is permitted only under specified conditions and during certain periods. After that date, exchange can occur at any time until close of business on the second scheduled trading day immediately prior to maturity.
• Settlement: HIVE will settle exchanges by delivering cash, common shares, or a combination of both, at the issuer’s election.

The initial exchange rate is set at 206.9429 HIVE common shares per $1,000 principal amount of notes, equivalent to an initial exchange price of approximately $4.83 per common share. HIVE notes that this implies a premium of about 27.5% over the Nasdaq closing sale price on June 25, 2026, subject to adjustments tied to certain events.

Redemption, repurchase and fundamental change protections

The company outlined several investor mechanics that determine when holders may be able to force cash repurchases, or when HIVE may redeem the notes.

HIVE’s issuer may redeem the notes prior to July 5, 2029 only in whole and not in part, upon certain tax-related events. On or after July 5, 2029, redemption becomes available if the last reported sale price of HIVE common shares is at least 130% of the exchange price in effect for specified testing periods.

Holders also have rights tied to repurchase events. The issuer will be required to repurchase for cash notes on July 1, 2030, at a price equal to principal. Separately, if a “fundamental change” occurs, holders may require HIVE to repurchase for cash at 100% of principal plus accrued and unpaid interest, subject to the stated conditions and limited exceptions.

There is also a framework for potential exchange rate increases following certain corporate events or if holders exchange notes that have been called or deemed called for redemption during a related redemption period.

Proceeds and intended use of funds

HIVE estimates net proceeds of approximately $110.0 million from the offering, or about $124.5 million if the initial purchasers exercise the option in full. The company states that proceeds would be used to fund one or more of its direct or indirect subsidiaries, including capital contributions, for general corporate purposes, capital investment (including GPU purchases), and data center development.

In parallel, HIVE says it plans to use cash on hand to fund capped call transactions and may use a portion of the net proceeds to reimburse the cost of those capped calls. If the option is exercised, it expects to enter into additional capped call transactions tied to the incremental notes.

Capped call hedging and what it can mean for markets

Exchangeable debt often comes with equity hedge structures. In this case, HIVE entered into privately negotiated cash-settled capped call transactions with financial institutions. The cap price for the capped calls is initially $8.5275 per common share, which HIVE states represents a premium of 125% versus the Nasdaq closing sale price on June 25, 2026.

The company says these capped call arrangements are expected to reduce potential economic dilution upon exchange and to offset cash payments the issuer might otherwise be required to make above principal, within the capped range.

HIVE also flags that the counterparties’ hedging activity may involve purchasing common shares or entering derivatives near the time of pricing, followed by potential unwinds or further adjustments. The company notes that such actions could temporarily influence the market price of HIVE common shares and the notes.

Regulatory context for the private placement

The notes are being offered to persons reasonably believed to be qualified institutional buyers under Rule 144A. HIVE indicates it is relying on an exemption under Section 602.1 of the TSX Company Manual for Eligible Interlisted Issuers.

The company also states that the notes and any underlying shares are not registered under the U.S. Securities Act or securities laws in other jurisdictions, meaning resale would require an applicable exemption or registration.

Why the financing matters

For crypto and AI infrastructure providers, exchangeable debt can offer a way to raise capital without issuing straight equity, potentially deferring dilution until certain future conditions. At the same time, the equity-linked conversion mechanics, along with capped call hedges, can shape short-term trading behavior and longer-term outcomes for existing shareholders.

HIVE’s stated use of proceeds, which includes data center development and GPU-related capital investment, places the financing squarely in the category of compute buildout. Whether the company’s balance sheet and equity valuation respond positively will likely depend on the pace of deployment, utilization assumptions, and broader market sentiment toward both digital asset exposure and AI compute demand.