Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revision replaces the variable interest rate with a fixed rate, providing greater cost certainty as the company transitions into artificial intelligence and high-performance computing infrastructure, while also decreasing its bitcoin holdings. As of Tuesday, the company's bitcoin holdings stood at 15,680, a decline from 19,368 at the start of the year, according to bitcoin treasuries.net. The updated agreement retains the original loan size and collateral structure, with the company's bitcoin, USDC, and cash held with Coinbase Custody serving as security.
However, the loan's maturity has been extended by 364 days, with the option to extend it by an additional year, subject to lender approval. The loan operates under a loan-to-value framework, where collateral top-ups are required if the bitcoin price drops significantly, with a tiered system triggering top-ups at a 70% LTV ratio and liquidation at 80%. Consequently, Riot may continue to deplete its bitcoin reserve if the cryptocurrency's price remains weak, in order to fund its pivot into AI and HPC.
Riot's shares have declined by approximately 9% on Tuesday, to below $17, with the company scheduled to report its Q1 earnings on April 30.