Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing, replacing a variable interest rate with a fixed one to enhance cost predictability as the company transitions into AI and high-performance computing infrastructure while continuing to decrease its bitcoin holdings. By switching to a fixed interest rate, Riot gains greater predictability in its expenses as it expands into AI and HPC.
Meanwhile, the company is selling off its bitcoin stash, with its holdings decreasing to 15,680 BTC as of Tuesday from 19,368 BTC at the start of the year, according to bitcoin treasuries.net. The revised agreement retains the same loan amount and collateral structure, with Riot's bitcoin, USDC, and cash held with Coinbase Custody serving as security for the credit facility. However, the maturity date has been extended by 364 days, with the option to extend it by another year subject to lender approval.
The loan is governed by a loan-to-value framework that may require Riot to add more collateral if bitcoin's price drops significantly. The loan operates under a tiered LTV framework, where under normal circumstances, a top-up is triggered if the LTV ratio exceeds 70%, and liquidation occurs at 80%. As a result, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price remains weak, using the proceeds to fund its AI and HPC expansion. Riot's shares have fallen by around 9% on Tuesday to below $17.
The company is scheduled to release its Q1 earnings on April 30.