Riot Platforms has modified its $200 million credit facility with Coinbase Credit, as disclosed in an 8-K filing. This amendment replaces the floating interest rate with a fixed rate, providing greater predictability of costs, as the company continues to decrease its bitcoin holdings.
The switch to a fixed rate offers stability as Riot transitions into artificial intelligence and high-performance computing infrastructure, while also reducing its bitcoin reserves. As of Tuesday, the company held 15,680 BTC, down from 19,368 BTC at the start of the year, according to bitcoin treasuries.net. The revised agreement maintains the same loan size 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 further by a year, subject to lender approval. The loan operates under a tiered loan-to-value framework, where a top-up is triggered if the LTV ratio exceeds 70% and liquidation occurs at 80%.
Consequently, Riot may continue to deplete its treasury if bitcoin prices remain weak, in order to fund its AI and HPC initiatives. Riot's shares have fallen by around 9% on Tuesday, to below $17, with the company scheduled to report its Q1 earnings on April 30.